Question:
❓Which type of life insurance is permanent and pays out to your beneficiaries no matter when you die (as long as the policy is active)?
A) Term Life
B) Universal Life
C) Accidental Death Insurance
D) Group Life through work
Answer:
✅ B) Universal Life
Universal life is permanent insurance—as long as you keep it active, it’s guaranteed to pay out whenever you die, and it builds cash value with flexible premiums. That’s what sets it apart from the other options.
| Type | Lasts for life? | Builds cash value? |
|---|---|---|
| Universal life (permanent) | Yes—if you keep it active | Yes |
| Term life | No—expires at the end of the term | No |
| Accidental death | Only pays for accidental death | No |
| Group life through work | Usually ends when you leave the job | No |
Why the others fall short:
A) Term life only pays out if you die during the term—after that, it expires.
C) Accidental death covers accidents only, not illness or natural causes.
D) Group life through an employer usually ends when you leave the job, and the benefit is limited.
Universal life is one of the most flexible forms of permanent insurance, which is why it shows up so often in long-term planning. Want to see how the types stack up for your situation? The Which Insurance Is Right for You? course breaks it down.
