Which type of life insurance typically has lower premiums?

Term life insurance typically has lower premiums compared to other types of life insurance. This is primarily because term life policies provide coverage for a specific period, such as 10, 20, or 30 years, and do not accumulate cash value. The insurance company is only obligated to pay out the death benefit if the insured passes away during the term of the policy, which means that, statistically, the risk to the insurer is lower over shorter time frames, resulting in more affordable premiums for the policyholder.

In contrast, whole life, universal life, and variable life insurance policies generally have higher premiums. These types of insurance not only provide a death benefit but also feature a savings or investment component that builds cash value over time. The additional benefits and guarantees offered by these policies lead to higher costs, making term life insurance the most economical choice for those seeking basic life coverage without extra features.