Last Updated August 2025
Whole life insurance is a type of permanent life insurance designed to last your lifetime1, and it is the most common type of permanent life insurance sold today. The main benefit of a whole life policy is to help the people who depend on you when you’re no longer there.
Whole life policies provide a guaranteed death benefit throughout your lifetime, paid to whomever you designate. They accumulate cash value that you can use or borrow against2 during your lifetime. And the premiums remain level, meaning they don’t increase over time.
You might wonder, how much does whole life insurance cost? One disadvantage of whole life policies is that, because of their guaranteed features, they tend to be more expensive than term life insurance policies, which pay out a death benefit only if you die during the policy term. While many term life policies might cost hundreds of dollars a year, some whole life policies can cost thousands annually. The rates will vary based on your age, gender, health status and lifestyle factors like smoking, as well as the amount of coverage you choose.
Because whole life policies have a level premium that doesn’t increase over time, the level premium payments are designed to exceed the cost of term insurance at the beginning of the policy. Later, the premiums will be lower than the cost of term coverage. The higher premium lets the policy build a cash value within the contract. Unlike the cash value of a universal life insurance policy, which is subject to fluctuating interest rates or investment returns, the cash value growth of a whole life policy is guaranteed as long as premiums are paid.
The cash value also becomes an asset that you can borrow againstii for any reason, including paying premiums in the future. If you decided to terminate the policy before your death, you would receive the cash value, minus any outstanding policy loans, interest, or unpaid premiums, at the time you end the policy. When the policy matures, typically at age 121, the cash value grows to equal the death benefit. If you outlive the policy, it will pay out that cash value, minus any outstanding loans.
FCS-0917-21 07/25
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1 Lifetime coverage (or life of the policy) is guaranteed provided premiums are paid per the terms of the contract.
2 Cash values may be accessible through policy loans or partial surrenders. Policy loans that are not repaid and partial surrenders will reduce cash surrender value and death benefit. Policy loans are subject to interest charges. If your policy is a modified endowment contract, loans and surrenders may incur taxes and penalties.
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