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How Does Whole Life Insurance Work?

Whole life insurance is a type of permanent life insurance that remains in effect for the entirety of the policyholder's life. Although whole life insurance policies are generally more expensive than term life policies, they can be beneficial to people who leave an inheritance to their loved ones or are planning their estate.

Whole Life Insurance Frequently Asked Questions

How does whole life insurance differ from term life insurance?

As mentioned, whole life insurance policies are permanent, meaning they don't expire after a certain period of time as long as the premiums are paid on time and in full. Term life insurance policies are temporary and only pay out a death benefit to the beneficiary if the policyholder dies within the term of the policy. Typically, a term is between five and 30 years. 

If the policyholder outlives the term of their policy and decides they want to renew it, the monthly premium will likely increase. Whole life insurance generally guarantees a fixed premium.

Whole life policies also tend to be more expensive than term life policies because they generate cash value.

What are common types of permanent life insurance?

Whole life is one type of permanent life insurance. Other types of permanent life insurance include:

  • Universal life insurance — offers adjustable death benefits, premiums and cash value. These policies are typically more flexible than whole life policies.
  • Variable life insurance — splits your premium payments into a market-based cash value portion. Tying your policy to stocks, bonds, and money markets may be more volatile than a whole life policy.

To learn more about your life insurance options, speak to a licensed life insurance agent at 1-855-303-4640 or read through our guides below.


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Applications for life insurance may be subject to acceptance by insurer. Issuance of the policy may depend upon answers to health questions. Rates and coverage amounts depend upon the carrier selected. Your policy may be subject to underwriting approval. You will receive only the benefit amount in the policy issued.

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