Benefits of Whole Life Insurance
Lauren Lewthwaite Last Updated On: April 8, 2022

How Does Whole Life Insurance Work & Is It Right For You?

Benefits of Whole Life Insurance

Most people like the idea of life insurance, but choosing the right plan for you can be overwhelming. Whole life insurance is just one of the many options for life insurance out there; we’ll dive into the advantages of whole life insurance and how it works so that you can make a more informed choice when it comes to protecting your loved ones should the worst happen. 

Free Life Insurance Comparison - Save up to 30%

No junk mail. No spam calls. Free quotes.

No Signup required

What Is Whole Life Insurance?

Whole life insurance is just one form of life insurance available to you. The two main forms of life insurance are term and whole life insurance:

  • Term life insurance: lasts a set term (such as 10,20, or 30 years) before expiring. If you pass away during that term, your beneficiaries receive your death benefit. If not, your life insurance expires.
  • Whole life insurance: lasts your entire life, no matter how long you live. Your beneficiaries are guaranteed a death benefit and your life insurance premium also comes with a cash value component.

Term and whole life insurance are quite different in terms of their benefits, but we’ll dive into whole life insurance here.

How Does Whole Life Insurance Work?

Whole life insurance lasts your entire lifetime, meaning your children and spouse are guaranteed to receive a lump sum payment no matter how long you live. For those that don’t like the idea of paying into a term life insurance policy for 30 years and potentially not seeing a payout, whole life insurance is a good option. 

Whole life insurance also has a cash value component; part of your insurance premium is funneled into investments that build a savings account for you over time. You can even borrow against this savings account during your lifetime for major life purchases, such as a house, college for your children, and more. 

Whole life insurance lasts your entire life and the premiums stay fixed for the entirety of the policy. It’s worthwhile to note though that your policy could be voided if you miss payments, so you’ll want to be sure the premiums are affordable even if your financial situation changes. 

Free Life Insurance Comparison - Save up to 30%

No junk mail. No spam calls. Free quotes.

No Signup required

What Are the Benefits of a Whole Life Insurance Policy?

A whole life insurance policy comes with a number of benefits, including:

  • Fixed premiums: your payments are guaranteed to stay fixed throughout your lifetime, which can help with financial planning (especially as you get older).
  • Savings component: part of your insurance premium gets invested for you and the growth is tax-deferred. 
  • Guaranteed payout: you know that your beneficiaries are guaranteed to get a payout, no matter how long you live.
  • Coverage for life: even if your health status changes over the years, you’re still guaranteed coverage.

There are many pros of whole life insurance, but these advantages do come with higher premiums than term life insurance. Make sure that the plan fits into your budget and lifestyle because the plan is only valid as long as you keep up with the premiums. 

The Benefits of Whole Life Insurance: What You Should Know

Whole life insurance is a very popular form of life insurance, and for good reason: it gives you peace of mind that your loved ones are covered no matter what. While the reassurance this gives you can be priceless, whole life insurance does come at a higher cost than term life insurance but you can easily find a whole life insurance policy that fits your budget and needs thanks to ConsumerCoverage. We’ll compare plans and find you the absolute best rate for your insurance needs so that you can save time and money. 

Free Life Insurance Comparison - Save up to 30%

No junk mail. No spam calls. Free quotes.

No Signup required

Lauren LewthwaiteLauren Lewthwaite has been freelance writing for almost five years writing content that ranges from health to insurance and everything in between. Lauren is also a trained translator in French and English and is a dog-mom to an adorable Australian Shepherd.