Whole Life, or “permanent” life insurance, is as the name implies. It offers insurance coverage for the whole of life (or up to age 100). The first day the policy is in force, the insured will have the full face amount of the policy as protection. This face amount remains the same throughout the life of the policy (and the life of the insured).

A whole life insurance policy gets its name because it requires an insured policy owner to pay premiums on the policy for his entire life. As the policy owner continues to pay the premiums, the cash value in the policy accumulates and the amount of pure insurance protection that the insurance company must provide decreases. The pure insurance amount is the difference between the face amount and the cash value. When the insured dies, the face amount of the policy, called the death benefit, is paid to the beneficiary. If the insured lives to 100, the cash value will equal the face amount and is paid to the insured in a lump sum.

Agents offer different whole life policy plans. There are only two differences in the plans: premium rates and resulting cash values.

ADVANTAGES OF WHOLE LIFE
• Constant premium cost based on age at the time of application; never increases.
• Provides permanent protection against early death.
• Provides for last illness and funeral expenses.
• Provides an immediate estate.
• Provides an automatic savings plan.
• Builds cash and loan value that can be used for emergencies.
• Provides non-forfeiture values that cannot be lost if the premium stops.

DISADVANTAGES OF WHOLE LIFE INSURANCE
• The premium paying period may last longer than the insured’s income-producing years.
• It does not provide as much protection per premium dollar as term insurance.