Margaret Huntley Last Updated On: February 9, 2024

Whole Life Insurance: Life Insurance For Your Entire Life

Life insurance is almost always a good idea. It helps protect your family should the unexpected happen while giving you peace of mind. It’s a smart choice for you and your loved ones, but the options for life insurance can be overwhelming. 

We’ll do a deep dive into whole life insurance and how to find the best whole life insurance policy for your needs. 

Let’s start with the basics: what is whole life insurance?

What Is Whole Life Insurance?

Whole life insurance is a type of permanent life insurance that ensures your policy outlasts your life. This may sound a bit morbid, but when all is said and done, this is what matters: That the people you love get the financial support you intended them to have. Whole life insurance is lifelong coverage with consistent premiums and a cash value account. This type of insurance is different from term life insurance, which is a life insurance policy that expires after a set term, say 20 or 30 years. The main components of a whole life insurance policy include:
  • Fixed Premiums For The Duration Of The Policy
  • Guaranteed Death Benefit
  • A Cash Value Account
Whole life insurance is designed to last your entire lifespan, regardless of how long that is.  
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Table of Contents

The Benefits of a Whole Life Insurance Policy

Whole life insurance is refreshingly dependable, which is why many people choose one for themselves and their family. It’s a guaranteed way to protect the ones you love should anything happen to you. With consistent (although more expensive) and fixed premiums, you can budget whole life insurance into your finances more easily knowing your payment won’t ever change. 

A whole life insurance policy also comes with a cash value account, which can be quite a benefit. It’s a type of savings vehicle that can actually be used during your lifetime. Part of every premium you pay gets moved into the cash value account and you can borrow against it or even use it in emergencies. 

Whole Life Insurance Quotes & What to Look For?

Whole life insurance is not the lowest cost life insurance you can find; after all, the guaranteed death benefit, fixed premiums and cash value component are advantages that come with a price tag. But that doesn’t mean whole life insurance quotes are prohibitively expensive either.

Whole life insurance quotes will depend on how much coverage you purchase and a few other factors. For example, whole life insurance premiums are typically paid once a year, but you may have the option to pay monthly or quarterly for additional fees. Depending on what the fees are, this may or may not make sense for you. 

The coverage you choose can vary significantly. If you want a smaller policy that might simply cover your end-of-life expenses, a $10,000 policy is an option. If you want a larger policy that will ensure your loved ones won’t face any financial hardship or a policy that will help fund a trust, you might look at coverage of several hundreds of thousands of dollars.

So, it makes sense that the premiums will vary greatly depending on 
how much coverage you choose. The more coverage you opt for, the higher the cost.

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How to Choose the Best Whole Life Insurance Policy For You?

You have options when it comes to whole life insurance, and the right policy for you will depend on a variety of factors.

Here are the most significant:

  1. Cash Value Account. Each insurance provider will offer different terms for the cash value account, including the rate of return, minimum growth rate, potential to earn dividends, and your ability to borrow against the account. Make sure you understand the terms and conditions of the cash value account since this is a major component of a whole life insurance policy.
  2. Approval Process. Every life insurance policy will have an approval process, and whole life insurance is no exception. Life insurance can be risky for insurance providers, so they will want to find out as much information as possible before approving your policy. This can include questionnaires, applications, and health exams. To get the most competitive quote for whole life insurance, you’ll likely need a medical exam.
  3. Premiums. Depending on the coverage you choose, the premiums for your whole life policy can vary significantly. Luckily, they are stable over the course of the policy, which can actually make them more affordable than other more variable policy premiums. Make sure the premiums are affordable and that you’ll be able to continue to pay them year after year–otherwise, your policy could be voided.

Understanding the components of a whole life insurance policy will help ensure you’re choosing the right type of life insurance for you while getting the best possible setup for your life and family. 

Whole Life Insurance Riders

Whole life insurance isn’t a one size fits all solution and features called riders will help you customize the plan to fit your exact needs and lifestyle. Think of riders as a-la-carte additions to your whole life insurance policy.

Some examples include:

  • Accelerated Death Benefit
  • Chronic Illness Rider (Access your death benefit early if you develop a chronic illness or become terminally ill)
  • Waiver of Premium Rider (Option to skip premium payments if you become disabled)

The availability and cost of these riders vary by provider, so if you’re interested in purchasing one make sure to do your research.


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Why Buy a Whole Life Insurance Policy?

Whole life insurance provides a death benefit for the entire life of the policyholder, however, unlike most term life policies, it also has a savings component that accumulates cash value. This cash value can be accessed as a loan to pay expenses like education or to supplement retirement income. Permanent or traditional life insurance policies are whole life policies but not the only form of this type of insurance coverage. Several variations of another permanent life policy called universal life are also available.
  • Death Benefits: Provides a lump sum payment for the beneficiaries upon the policyholder’s death
  • Cash Value: Cash available as a loan against the policy for many uses including a supplement to retirement income
  • Guarantee: Guaranteed lifetime coverage at a level premium with cash value accumulation

Advantages of Whole Life Insurance

Whole life insurance is an attractive life insurance option. The advantages of whole life insurance are many, and include:

  • The guaranteed payout for your loved ones (as long as you pay your premiums)
  • Lasts your entire life, no matter how long you live
  • Has a cash value component that you can borrow against
  • Premiums stay level throughout your life

That last point is important: knowing that your premiums won’t change, you can better financially plan for your later years.

You can also purchase additional riders on your whole life insurance policy. Some of the most common riders include waiver of premium, which protects the death benefit if the policyholder becomes disabled or critically ill and can no longer pay premiums, as well as the accidental death benefit rider.


Getting Whole Life Insurance Quotes Online

So how much does whole life insurance cost? It’s based on a number of factors, including:

  • Age
  • Health history
  • Occupation
  • Credit score
  • Nicotine use
  • Driving record

Every insurance provider uses their own formula to determine insurance rates, so this list is not exhaustive. The amount of coverage you’re looking for will also affect your rates. On average, a 30-year-old man can expect to pay $4,824 per year for a $500,000 policy, while a 50-year-old man can expect to pay $11,118 for the same.

Generally, the younger and healthier you are, the lower your rates will be. Buying young means you’ll lock in a great rate for the rest of your life, because whole life insurance premiums stay level, although you’ll be paying premiums for more years. Having a hazardous occupation will also likely increase your premiums, so keep an eye out for that.

It’s safe to say that whole life insurance is more costly than term life insurance, so you’ll want to be sure that the advantages of whole life insurance are worth the higher premiums to you.


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Is a Whole Life Insurance Policy Right For You?

Whole life insurance is an excellent option for those looking for a policy they can depend on. If you want rates that won’t change or increase as you get older, you’ll appreciate whole life insurance. If you want to build a safety net with the cash value account, whole life insurance is unique that way. And if you want to ensure your loved ones will receive a payout in the event of your passing, whole life insurance makes sense. 

However, for many families, term life insurance is sufficient and affordable. For those looking for more flexibility, universal life insurance might be a better fit. Understanding the different types of life insurance policies and what you’re looking for will help you determine if whole life insurance is right for you.

Key Takeaways for Whole Life Insurance

Whole life insurance is a great option for those who like predictability. You’ll pay fixed premiums, be guaranteed a death benefit, and the cash value account will be stable over time. You’ll also have the option to use your cash value account during your lifetime, which can be a draw for many. 

It’s important to note that a whole life insurance policy depends on you paying your premiums on time and not overdrawing your cash value account. In order to ensure your beneficiaries receive your death benefit, it’s critical to keep your policy in good standing. 

Whole life insurance is a reliable, stable form of life insurance with many advantages. Request a quote today to explore your options. 

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Whole life insurance is a form of life insurance that lasts your entire life, as opposed to term life insurance that’s only for a set amount of years. Whole life insurance also has a cash value savings component to it.

A cash value account is the savings component of a whole life insurance policy. Part of your premiums are funneled into the cash value account, which grows steadily over your lifetime. You can sometimes take a loan from the cash value account, use it during emergencies, and even receive dividends from it.

Both are great options for life insurance. The right policy for you will depend on a variety of factors, including your age, finances, and what you’re looking for from a life insurance policy. Whole life insurance is typically more expensive but lasts your entire lifetime and has other advantages. Term life insurance is for a set term, so it’s less expensive but expires by the end of the term.

Though more expensive than comparable term coverage, the added benefits of cash or loan values and the level premium are a plus for many.


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