Happy family with mom, dad, and two kids | Whole life insurance information

What is whole life insurance? It's a type of permanent life insurance that covers you for your entire life. Think of whole life as a "set it and forget it" type of policy because you never have to worry about renewals or expiration dates.

Here are the main reasons our clients choose whole life insurance:

☑️ Lifetime protection
☑️ Guaranteed death benefit
☑️ Locked-in payment amount that will never increase
☑️ Locked-in interest rate that will never decrease
☑️ Guaranteed cash value growth
☑️ Pay all at once or over time (monthly, quarterly, semi-annually, annually)

Call 800-823-4852 to get whole life insurance quotes!

Or use the quoter on this page and select "Lifetime" for coverage length

If you think that sounds pretty good, you're not alone. Guaranteed whole life insurance policies are the most popular type of permanent life insurance, according to the Insurance Information Institute. Why do so many people choose them? It's because a whole life insurance policy is easy and straightforward. If you just want to be covered for your whole life and never worry about an expiring term, this policy can do exactly that. Your premium payments are fixed and they'll never go up, no matter how long you live. They're locked in when you buy your policy. It's one less thing you have to worry about!

Plus, as long as you keep making those payments and keep your policy active, you're guaranteed that it will pay out when you pass away. Your loved ones will know exactly how much the death benefit will be, which can help make future planning easier. In almost all cases, that death benefit is income-tax-free. Easy, right?

Call 800-823-4852 to get whole life insurance quotes!

Or use the quoter on this page and select "Lifetime" for coverage length

Ready to find out if a whole life policy is right for you? We've compiled more information and buying tips below to help you find out.

Jump to a section:

What Is Cash Value?
Is Whole Life Insurance Right for Me?
Why Does Whole Life Cost More Than Term Life?
How Is Whole Life Different from Term Life?
Different Types of Whole Life Insurance Policies What's the Best Permanent Life Insurance?


What Is Cash Value?

One of the advantages of permanent life insurance is that is builds cash value. As a type of permanent life insurance, whole life policies build a type of equity called "cash value." Think of cash value as a savings account tied to your policy. Every time you make a payment on your policy, that money does two things: (1) most of it pays for policy's death benefit, but (2) a small portion goes into your cash value account. That's where your guaranteed interest rate comes in. Your cash value account earns interest at that guaranteed rate, which compounds over time.

The good news? You can usually withdraw part of that cash value or take out a loan. That means your cash value is also a financial safety net you can use later in life, should you need it. Every life insurance company has different rules about how much they let you borrow and the interest rates they may apply. And keep in mind that the amount you borrow can reduce the death benefit, which means your loved ones will get paid less when you pass away.

Many of our clients like knowing there's a backup plan, and cash value contributes to that sense of long term financial security.

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Is Whole Life Insurance Right for Me?

That depends! First, let's talk about what a whole life insurance policy can and can't do.

There are four main reasons to choose this policy over a term life policy:

  • To get a guaranteed death benefit, as long as you keep your policy active
  • To provide an inheritance for your kids
  • To make sure you're covered for life
  • The freedom to choose one lump-sum payment or installment payments by month or year

There are also four good reasons not to choose this type of policy:

  • You only want coverage for a specific amount of time
  • You can't afford the higher cost of a whole life policy
  • You need more liquid cash available to you during your lifetime
  • You need a policy that has smaller monthly payments

If you want to "set it and forget it" and like the idea of a guarantee, whole life policies are a good match for you. You can get whole life insurance quotes online – including right here on my website. If you want more information about any type of permanent life insurance, give me a call today!

Call 800-823-4852 to get whole life insurance quotes!

Or use the quoter on this page and select "Lifetime" for coverage length

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Why Does Whole Life Cost More Than Term Life?

Yes, it's true - whole life typically costs more than term life insurance. If you're on an extremely tight budget, term life might be a better fit.

But with whole life, you get two significant guarantees: it guarantees the growth rate of its cash value, and it guarantees a death benefit. Those promises are pretty expensive to make…especially since the insurance company is guaranteeing the interest rate on your cash value. That rate is locked in at the time you buy your policy, and they have to pay you that rate for potentially decades to come, depending on how long you live. That’s why whole life insurance cost is significantly more than either term life insurance or universal life insurance.

Is it worth paying more? That’s up to you. But the cash value of whole life insurance does two significant things:

  1. It provides an emergency fund to be used just like any other asset.
  2. It accumulates on a tax deferred basis.

Your policy's cash value is an asset, just like your house, real estate, savings accounts, or mutual funds. And since it's an asset, you can use it to help you with a variety of things like college costs, purchasing a new home, or supplementing your retirement. Like any permanent life policy, whole life helps you when you're here, and protects your family when you're gone.

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How Is Whole Life Different from Term Life?

Term life is obviously a shorter-term solution than a whole life policy. It's cheaper, it still gives you a guaranteed death benefit, and you can pick how long the policy lasts.

But here’s the difference…though you pay less each month for a term policy, you don't get a chance to make that money grow. Once it’s gone, it’s gone. That’s not the case with any permanent life policy, including a whole life insurance policy. This is one of the special benefits of a whole life policy.

The added benefit of whole life is that while you get the same coverage, you also get an investment aspect to the policy with cash value. This way, you're protected, but you still have the benefit of that cash value if you outlive your needs for the original policy. Compare that to a term policy, where you have zero return if you outlive your policy.

If you're looking for a way to leave more money to your kids, for example, whole life might be the best permanent life insurance solution for you. If you're looking for an inexpensive or short-term solution, this might not be the right place to put your money.

Call 800-823-4852 to get whole life insurance quotes!

Or use the quoter on this page and select "Lifetime" for coverage length

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Different Types of Whole Life Insurance Policies

There are different ways to customize a whole life policy, depending on your needs. Most people like the safe, steady guaranteed payment amounts that whole life offers. But if you're looking for options in terms of your premium payments, we can look into some alternate life insurance offers for you.

Here's an overview of what else we can help you find:

☑️ Participating whole life insurance policies

This type of policy pays dividends to the policyholders. If you're invested in Wall Street, you're probably familiar with the idea of dividends. When the company you own stock in does well, any profits that aren't re-invested in the company are divided up between the shareholders.

Dividends from a participating policy work the same way, with one key advantage for you: you get a tax break. Normally, you'd have to pay tax on dividends issued by a company you own stock in. But because you're always putting money into your life insurance policy (by making your monthly payment), the IRS considers your dividends as a partial refund of your monthly payments. The upside here is that you don't have to pay tax on the dividends because they're not treated as income.

Exception: You will have to pay tax on your dividends if you get back such a large amount that it's more than what you've paid into your policy during that tax year. This is very rare, and probably won't happen unless you have a single-premium policy (see below).

☑️ Single premium whole life insurance policies

This type of policy has just one payment for you to make—you pay the entire thing up front. Why would anyone do this? This type of policy has a built-in advantage because the death benefit is higher than the premium you pay up front. Think of it as a kind of loan. You're giving the insurance company money up front, and they give you back an even bigger amount of money later.

The cash you invest in this policy is going to build equity quickly because of the large sum you started with. This makes it a good idea for younger people who have time to let the policy build up a good deal of interest. For example, a 50-year-old man might get a $100,000 single premium policy and end up leaving a $400,000 death benefit when he passes away. Of course, few of us have $100,000 to start with, so this is an extreme example, but it shows you the kind of potential life insurance that builds cash value can have.

☑️ Modified premium whole life insurance policies

Modified premium whole life insurance is distinguished from traditional whole life by the fact that your payments aren't constant for the duration of the policy. Your premium payments begin low, and after a number of pay periods, they jump to a higher level. Premiums stay constant at the higher amount for the remainder of the policy’s lifetime.

The strategy behind a premium plan is that it enables you to have a larger amount of life insurance coverage than your finances would otherwise permit during the early years of the policy. In later years, when you have more earning power, you can make up the difference by paying the higher premiums.

As with a traditional whole life insurance plan, the death benefit for modified premium life insurance is fixed and guaranteed.

Modified premium whole life insurance is similar to graded premium whole life. The only difference is in how quickly the policy jumps between the initial premium level and the final premium level.

☑️ Adjustable whole life insurance policies

Traditionally, a policy’s death benefit and premium are fixed at the time your life insurance contract goes into force. Adjustable whole life insurance, however, leaves these elements in your hands, to modify as your needs change over time.

For example, if you find yourself in need of a bigger death benefit, you can increase yours (though your insurance company may require an up-to-date medical exam for an increase). On the other hand, if you need to lower the cost of your insurance, you can decrease the death benefit and the premium will shrink to match.

If you don’t like the idea of medical exams, you’re not alone. The pandemic has forced life insurance companies to offer policies without any physical contact - including a medical exam. If you’re interested in a non-med policy, you have more options than ever before!

Call 800-823-4852 to get whole life insurance quotes!

Or use the quoter on this page and select "Lifetime" for coverage length

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☑️ What's the Best Permanent Life Insurance?

That depends – everyone’s financial situation is different. It can really help to talk it out with an insurance agent. It’s our job to know all the different insurance companies and the types of life insurance they offer.

In just a few minutes, one of our licensed insurance advisors can help you find the policy type that’s right for you. Looking for sheer affordability? Term life is probably your best bet. Rather have a guaranteed payout no matter when you pass away? A permanent policy is a safe choice. But there are dozens of companies, each with their own versions of all the policy types. We can help you find the best whole life insurance rates and make sure the policies you see have the features and benefits you’re looking for.

What are you waiting for? Call us now at 800-823-4852 and let’s get started!

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Call 800-823-4852 to get whole life insurance quotes!

Or use the quoter on this page and select "Lifetime" for coverage length


What's Next?

  • Start shopping for whole life insurance right now – use our quoter to compare rates online.
  • Get help by calling or emailing us for personalized advice.
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