Whole life insurance features a level premium and level death benefit to age 100 with an accumulating cash value that increases over time until it equals the set death benefit. Whole Life Insurance covers you for as long as you live, if the premiums are paid. Whole Life Insurance pays a death benefit to the beneficiary you name and offers you a cash value account and tax- deferred cash accumulation. The policy remains in force during your entire lifetime and provides permanent protection for your dependents while building a cash value account. The insurance company manages your policy's cash accounts.

Cash value is an amount of money that you are guaranteed to receive in the event of policy cancellation. Your premiums are invested on behalf of the policy, generating the build-up of the cash value. Over time, your premiums grow like any other investment and the rate of return (yield) can vary from company to company. You also have the right to borrow against the accumulated cash value for whatever reason you choose – to make purchases, cover expenses or to apply towards the premium itself (in effect paying for itself).

When you first take out the policy, premiums may be higher than you would pay initially for the same amount of term insurance. They will be smaller than the premiums you will eventually pay if you were to renew a term policy until your later years.

Whole life is suitable for long-term obligations, such as surviving spouse lifetime income needs, estate liquidity, death taxes, funding retirement needs, etc. Whole life also provides a good cornerstone for a complete protection package for your family and your assets.

Pros:
Whole Life Insurance has a savings element (cash value) which is tax- deferred. You can borrow from or cash in the policy during your lifetime. It has a fixed premium which can't increase during your lifetime (as long as you pay the planned amount) and your premium is invested for you long-term.

Cons:
Whole Life Insurance does not allow you to invest in separate accounts, i.e. money market, stock, and bond funds. Does not allow you to split your money among different accounts or to move your money between accounts and allows no premium flexibility nor face amount flexibility.