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Whole Life Insurance

Whole life insurance is the most common type of permanent life insurance. Like other types of permanent life insurance (universal life insurance and variable life insurance, for example), whole life insurance provides coverage for as long as you live, as long as you remain up to date on paying your policy premiums.

Whole life insurance policies feature fixed premiums for the life of the policy. With plan premiums that won’t increase, you can experience improved transparency and predictability with your long-term life insurance costs.

Whole life insurance policies can also accrue cash value over time. Once your policy has built up enough cash value, you can typically withdraw it or borrow against it like a loan.*

Loans or withdrawals may affect your policy’s cash value and the death benefits tied to the policy, so make sure you understand the terms associated with your whole life insurance policy.

Unlike variable life insurance, the cash value of a whole life insurance policy is not dependent upon the market. In fact, most whole life insurance policies grow a cash value at a guaranteed minimum rate.

Who Should Purchase Whole Life Insurance?

You might benefit from a whole life insurance policy if you are a high-income earner who has maxed out your 401(k) or IRA contributions. By buying whole life insurance, you can ensure that additional money is set aside for your loved ones to use however they may need when you pass away.

Additionally, if you who wish to leave an inheritance to a beneficiary and you desire the predictability that fixed premiums can offer, you could potentially benefit from purchasing a whole life insurance policy. Some experts say this makes it the best life insurance for seniors.

Term Life Insurance vs. Permanent Life Insurance

Because of the cash value component and the fact that the policy could be in effect for the rest of your life, Whole Life Insurance premiums are typically more expensive than term life insurance premiums.

This chart helps to illustrate some of the primary differences between Term Life Insurance and Permanent Life Insurance policies.

Term vs Permanent Life Insurance
  Term Life Insurance Permanent Life Insurance
Policy Length Common term lengths are 10, 20, and 30 years1 The rest of your life as long as premiums are paid
Cash Value NO YES
Premium Structure Remain level or increase over time, depending on your policy Remain level through the life of the policy, or may be adjusted depending on the policy
Additional Considerations Doesn't accumulate cash value but is typically less expensive than Permanent Life Insurance Monthy premiums are typically more expensive since the policy can accumulate cash value and is priced to keep over a long period of time.

Is Whole Life Insurance Right For You?

If you want a permanent life insurance policy with cash value accessibility while also enjoying fixed policy premiums, whole life insurance could be a good fit for you.


*A permanent policy's cash value can be used to pay premiums, or may be accessed via loans or withdrawals. Policy loans and withdrawals will reduce cash values and death benefits, and may cause the policy to lapse. Additional premium payments may be required to keep the policy in force. Withdrawals may be subject to a surrender charge. Withdrawals and any unpaid loans are subject to ordinary income tax and, if taken prior to 59 1/2, a 10% federal additional tax.

1Some carriers may allow for different term lengths, as low as 5 years or as high as 40 years, for example.

This is not a comprehensive overview of all relevant features and benefits. Carefully review all of the material details about these products before making a decision.

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