Whole life insurance is the most traditional kind of permanent coverage. It is designed to last your whole life, with predictable payments. Here is what you get and what it costs.
What makes it different
- Coverage for your entire life, as long as premiums are paid.
- Premiums that stay level.
- Cash value that grows at a guaranteed rate set in the contract.
Dividends
Some whole life policies from mutual insurers may pay dividends. Dividends are not guaranteed, but when paid they can be taken as cash, reduce premiums, or buy more coverage.
The trade-off
Whole life costs more than term life for the same death benefit. Loans against cash value reduce the death benefit if not repaid.
Who may consider it
People who want certainty — fixed costs, lifelong coverage, and steady guaranteed growth — often choose whole life, sometimes for leaving a legacy.
The bottom line
Whole life is the simple, predictable form of permanent insurance. You pay more for that certainty.
Learn about whole lifeThis article is for educational purposes only and is not tax, legal, or investment advice. Insurance and annuity products are not deposits, not FDIC insured, and not guaranteed by any bank. Guarantees are backed solely by the financial strength and claims-paying ability of the issuing insurer. Product features vary by insurer and state.
