Whole Life Insurance: A Guide to Permanent Coverage

Whole life insurance is a form of permanent life insurance. As long as you pay your premiums, the policy stays in force for your entire life. When you pass away, your beneficiaries receive the death benefit stated in the policy contract.

Whole life policies also include a cash value component. A portion of each premium payment goes into this account, which grows on a tax-deferred basis over time. You may be able to borrow against the cash value or withdraw from it, depending on the policy terms.

Whole life vs. term life

Term life insurance covers you for a set number of years and does not build cash value. It is often the most affordable option for temporary needs, such as covering a mortgage while your children are young. Whole life costs more but provides permanent protection and the cash value feature.

Who should consider whole life?

Whole life may appeal to you if you want coverage that never expires, prefer predictable premiums, or like the idea of building cash value you can access later in life. It is commonly used for estate planning, leaving a legacy, and covering final expenses alongside other financial goals.