Whole life insurance is a policy that builds cash value and offers many guarantees. It's a simple way to buy a policy that will last your entire life. It's also generally an expensive way to buy life insurance because of all the guarantees within the policy.

How does a whole life policy work?

With a whole life insurance policy, you pay the same amount every year (or every month), and the life insurance company pays a death benefit to your beneficiaries when you die. Some policies can become “paid up” after many years, which means you no longer have to make payments.


Here are the main advantages of whole life:

  • Premiums stay the same. There are no surprises with payments.
  • The policy builds cash value. A portion of your premiums goes into a cash value account. You can take a loan against this amount or withdraw cash.
  • The investment return on cash value is guaranteed. The cash value grows at a steady rate.
  • The death benefit is guaranteed. The amount your beneficiaries will receive is guaranteed. But note that the death benefit they get is typically the face amount of the policy, not the face amount plus the cash value. For example, if you have a whole life policy with a face value of $500,000 and it has $12,000 in cash value, your beneficiaries would get $500,000 upon your death.

Top sellers of whole life insurance

Guardian Life Insurance Co. of America

  • Choices include whole life insurance for people with HIV.
  • Potential to receive dividends.

MassMutual Life Insurance Co.

  • Choices include simplified whole life insurance for people ages 40 to 80 who want to cover final expenses such as funeral costs and debts. These policies don’t require a medical exam.
  • MassMutual’s SpecialCare program provides financial planning and information for families with children who have disabilities and special needs.
  • Has advisors who give personalized advice.
  • Potential to receive dividends.

Mutual of Omaha

  • Offers whole life insurance for people ages 45 to 85.
  • Policy amounts start at $2,000.
  • Has online quotes for some whole life policies.
  • Some policies include free funeral planning services.

New York Life

  • Choices include “custom whole life” for people who want to pay over a short period of time or build cash value fast.
  • Has financial professionals to help you make a plan.
  • Potential to receive dividends.

Northwestern Mutual

  • Has advisors who help you design tailored financial plans.
  • Potential to receive dividends.

Top sellers source: LIMRA, based on annualized premiums in 2018, shown in alphabetical order.

What’s the best whole life insurance?

The best whole life insurance will be a policy that’s competitively priced and backed by an insurer with a good financial strength rating.

Life insurance companies usually show their financial strength ratings on their websites, or ask the advisor or agent for the rating.

Here are explanations of what ratings indicate:

In addition, you may want life insurance riders that add extra coverage features, so the best whole life insurance will include the riders you want.

A good policy also usually includes an accelerated death benefit option, so you can tap into the policy’s death benefit if you become terminally or chronically ill. This can be very valuable for paying medical bills or other health-related expenses.

What does whole life insurance cost?

The cost of a whole life policy will often depend on your age, sex, health and other factors. You’ll need to get life insurance quotes to know exactly what you’ll pay. And it’s smart to compare quotes.

Some whole life policies do not take health into account and you can’t be turned down. Here’s more about guaranteed issue life insurance.

Here’s an example of costs at different ages for a $1 million whole life policy for someone in excellent health from SBLI. These policies require a medical exam.

Sex and age Annual cost for $1 million whole life insurance
Male age 25

$8,750

Male age 30

$10,270

Male age 35

$12,230

Male age 40

$14,740

Male age 45

$17,970

Male age 50

$22,210

Male age 55

$27,900

Male age 60

$35,540

Female age 25

$7,810

Female age 30

$9,170

Female age 35

$10,870

Female age 40

$12,990

Female age 45

$15,720

Female age 50

$19,230

Female age 55

$23,770

Female age 60

$29,650

See methodology below

Is a whole life policy worth it?

Whole life is usually an expensive way to buy life insurance, but it can be worth it if you want all the guarantees provided by that type of policy.

Term life insurance is usually much cheaper and fits the needs of many life insurance shoppers. Term life policies last for a specific number of years, and 30-year term life is commonly available to cover longer-term needs, especially if you’re under age 60 and in good health. There’s even a 40-year term life policy available from Banner Life.

Can I withdraw money from my whole life insurance?

You can withdraw money from a whole life policy’s cash value or borrow against it. If you borrow money, you can repay it with interest. Money taken out of cash value and not repaid will be deducted from the death benefit when you die.

What happens to cash value in a whole life policy at death?

The cash value generally reverts back to the life insurance company upon your death. Your beneficiaries get just the “face value” of the policy, unless you’ve bought a policy that specifically pays out a death benefit plus cash value. That kind of policy will cost more.

Who is whole life insurance good for?

Whole life insurance is good for people who have a long-term financial obligation that can't be covered by term life insurance. For example:

  • You have a special needs child who needs lifelong financial support.
  • You want to provide money for the cost of a funeral and final expenses, such as possible medical costs, no matter how long you live.
  • You want to provide an inheritance and won't have the savings for it.
  • You have a family business and want to provide funds to keep it going, no matter when you die.

Other ways to get lifelong insurance

Whole life isn't the only policy type that lasts an entire life. Other forms of "permanent life insurance" are:

  • Universal life insurance such as guaranteed, indexed or variable universal life.
  • Survivorship life insurance (also known as first-to-die or second-to-die life insurance, depending on the policy).

Methodology for rates: Whole life cost examples are from SBLI. Rates are for men and women of average height and weight, non-smoking, with normal blood pressure, in excellent health, with no DUIs or tickets on their driving records. Your own rates will be different.