Whole life is permanent coverage that will remain in force as long as premiums are paid in a timely manner.  It has some advantages over another type of permanent coverage known as universal life.   However, its premiums are considerably higher because it generates “cash value” within the policy. 

Advantages of whole life include the tax free build up of cash, the ability to have dividends purchase additional coverage (in mutual companies), and the ability to borrow from the policy on a tax free basis under certain circumstances.

There are several types of whole life.

Standard (Traditional) Whole Life Insurance
This type of Whole Life insurance has been known as “permanent” life insurance for generations.  In addition to a death benefit, Whole Life is designed to provide a build up of cash value within the policy.  This cash value earns interest and/or dividends that are established by the insurance company.

Customized Whole Life Insurance
Customized Whole Life policy allows the policyholder to select how long premiums are paid.  It can be designed to maximize the cash value within the policy at different times during the insured’s lifetime for planned expenditures such as college costs and retirement planning.

Modified Premium Whole Life Insurance
Modified Premium Whole Life offers the same guarantees of traditional or customized Whole Life, however initially has a lower premium that increases in later policy years.