Which type of insurance generally has lower premiums?

Term life insurance is known for typically having lower premiums compared to other types of life insurance policies. This is primarily because term life insurance provides coverage for a specific period, or "term," such as 10, 20, or 30 years. If the insured individual passes away during that term, the beneficiaries receive a death benefit. However, if the term expires and the individual is still alive, no payout is made, and the coverage ends.

Since term life insurance does not build cash value like whole life, universal, or variable life policies, the costs associated with providing this type of coverage are generally lower. The insurance company is essentially taking on less risk in terms of long-term payouts, which allows them to offer more affordable premiums. Conversely, whole life, universal life, and variable life policies include investment components and typically have higher premiums due to their cash value accumulation features and lifelong coverage.