Whole life insurance: Whole life insurance is a form of permanent life insurance that remains in place as long as you make your payments. A whole life insurance policy is cash value life insurance. There’s a cash value component that accrues over time. You can access your cash value through a withdrawal or loan, or you could surrender the policy and walk away with the cash value (minus any surrender charge).
Benefits of whole life insurance
- Fixed premiums mean no surprise costs down the road.
- Builds cash value at a regular rate.
- Guaranteed death benefit.
- Life insurance riders, including living benefits, offer extra coverage and features, such as accidental death and dismemberment coverage.
Drawbacks of whole life insurance
- More expensive than term life insurance.
- The death benefit will be reduced if you withdraw from the cash value or don’t repay loans you take on the cash value.
