Whole Life Insurance
Permanent life insurance that lasts your entire lifetime with guaranteed cash value growth. Coverage that never expires.
What is Whole Life Insurance?
Whole life insurance is permanent coverage that lasts your entire life, as long as you pay premiums. It combines a guaranteed death benefit with a cash value component that grows over time at a guaranteed rate.
Your premiums remain fixed and never increase. Part of each premium payment goes toward the death benefit, and part goes into the cash value account that grows tax-deferred.
Key Features
Lifetime Coverage
Coverage lasts your entire life as long as premiums are paid. Never expires, unlike term life insurance.
Cash Value Growth
Builds cash value that grows at a guaranteed rate (typically 2-5% annually). You can borrow against or withdraw from this cash value.
Fixed Premiums
Premium amount is guaranteed to never increase throughout your lifetime.
Guaranteed Death Benefit
Death benefit amount is guaranteed and will be paid to beneficiaries no matter when you die.
Dividends (Participating Policies)
Some policies pay dividends that can increase cash value, reduce premiums, or purchase additional coverage.
How Cash Value Works
Cash value accumulates over time as you pay premiums. It grows tax-deferred at a guaranteed rate set by the insurance company.
Borrow Against Cash Value
Take out loans using your cash value as collateral. Interest rates are typically 5-8%. Loans don't require credit checks.
Withdraw Cash Value
Make partial withdrawals from your cash value. Withdrawals up to your premium basis are tax-free.
Surrender Policy
Cancel policy and receive the cash surrender value (cash value minus any fees). Note: Early surrender may result in fees.
Who Should Consider Whole Life?
High Income Earners
Maxed out other tax-advantaged savings
Estate Planning
Want to leave guaranteed inheritance
Long-Term Savers
Want forced savings with life insurance
Business Owners
Need permanent coverage for buy-sell agreements
Advantages
Permanent Protection
Coverage never expires if premiums are paid
Guaranteed Returns
Cash value grows at guaranteed rate
Tax-Deferred Growth
Cash value grows without annual taxes
Living Benefits
Access cash value for loans or emergencies
Disadvantages
- • Much more expensive than term life (5-15x higher premiums)
- • Slow cash value growth in early years
- • Lower returns than other investments (stocks, bonds)
- • Complex with high fees and commissions
- • Early surrender results in significant losses
Whole Life vs. Term Life
| Feature | Whole Life | Term Life |
|---|---|---|
| Duration | Lifetime | 10-30 years |
| Cost | 5-15x more expensive | Most affordable |
| Cash Value | Yes, grows over time | None |
| Premiums | Fixed forever | Fixed during term |
| Best For | Estate planning, permanent needs | Temporary protection, affordability |
Average Cost
Whole Life ($250,000 Coverage)
$200-500/month
Varies by age and health
Age 30
$200-280/month
Age 40
$300-400/month
Age 50
$450-600/month
Age 60
$700-900/month
What coverage level do you need?
Choose the protection that matches your requirements