Whole Life Insurance (What is it?)

The whole life insurance definition is that it is a type of life insurance that is permanent and will last for your entire life, as long as your premiums are paid and up-to-date. Many whole life insurance plans build interest for the policyholder. Read more to compare life insurance quotes and get whole life insurance rates starting at $13.13/mo.

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent

UPDATED: Jul 19, 2021

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Here’s what you need to know…

  • Age and gender are major factors that can affect life insurance rates
  • Many whole life insurance plans build interest for the payee
  • If you want it cheap, simple coverage, consider term life insurance

What is whole life insurance? With countless options under one major decision, we understand that shopping for life insurance is a task. After reading this article, we are confident you will move forward with the best whole life insurance options to get your best rates.

In this article, you can expect to learn about what whole life insurance is (and for comparison purposes, What is whole life insurance and term life insurance), compare whole life to other permanent life insurance policies, and help guide you to the best whole life policies available.

Before diving in to find out what whole life insurance is, click on the quote tool above to get your FREE life insurance quote. Get started now.

How to shop for whole life insurance quotes

As you start to consider whole life insurance or life insurance in general, it is important to know what companies will be able to best serve your needs. As of 2018, below are the top whole life insurance companies based on market share.

  • Northwestern Mutual
  • Metropolitan Group
  • New York Life
  • Prudential
  • Lincoln National
  • MassMutual
  • Aegon
  • John Hancock
  • State Farm

Above are just a handful of the many competitors that offer whole life insurance. Like all life insurance rates, there are a number of factors that influence whole life insurance. For the average, middle-aged person, you can expect to pay a little more now when compared to term life insurance. Don’t worry, there are some good reasons to choose whole life insurance.

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What are some sample whole life insurance rates?

You might be surprised to learn how different rates are between term and whole life insurance. Almost all life insurance companies are readily-available to quote you via their websites, but you can compare whole life insurance rates by using the FREE tool located on this page.

There are some easily-identifiable factors that affect whole life insurance. You may have heard how lifestyle can affect your life insurance rates, and those same factors are important to consider when quoting whole life insurance.

First and foremost, age and gender do still remain factors that can affect life insurance rates. Your hobbies, if dangerous or detrimental to your health, can also have a negative influence on your whole life insurance rates.

So, what is whole life insurance, and why are the rates so different compared to term life insurance? Fair questions. Let’s take a look at average whole life insurance rates for a female with $100,000 in coverage.

Average Monthly Whole Life Insurance Rates for a Female with $100,000 in Coverage
CompaniesAge 50 Average Monthly Rates Age 55 Average Monthly Rates Age 60 Average Monthly RatesAge 65 Average Monthly Rates
AAA $15.40$18.83$25.61$37.93
Accordia Life $41.83N/A$101.24N/A
AIG $15.04$20.96$25.58$44.93
Assurity $16.53$22.97$32.71$49.76
Foresters Financial $13.13$17.41$25.46$34.39
Liberty Mutual$32.94$39.15$59.76$81.27
Mutual of Omaha $16.73$21.97$29.20$46.57
State Farm $23.49$29.67$40.98$59.51
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In comparison, the table below looks at the rates for a male with the same amount of coverage.

Average Monthly Whole Life Insurance Rates for a Male with $100,000 in Coverage
CompaniesAge 50 Average Monthly Rates Age 55 Average Monthly Rates Age 60 Average Monthly Rates Age 65 Average Monthly Rates
AAA $17.78$22.53$37.14$59.93
Accordia Life$16.91$23.36$56.07$153.53
AIG $17.01$26.62$38.22$55.07
Assurity $20.10$28.45$44.20$67.08
Foresters Financial $15.31$20.83$34.04$43.66
Liberty Mutual $40.32$55.35$95.58$141.93
Mutual of Omaha$18.88$27.65$41.67$59.73
State Farm $26.54$34.45$51.50$83.09
TransAmerica $20.21$30.10$42.66$71.29
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Of course, the charts above compare the rates for a female to those of a male, but there are other factors that cause whole life insurance to have higher premiums as you can see in that whole life insurance example.

What is whole life insurance and how does it work?

Perhaps you’re familiar with term life insurance or are curious as to what it is compared to whole life insurance. When comparing term life insurance vs whole life insurance, know that these life insurance options vary in the duration you pay them, the amount you will pay, the cash value of the plan, and how the death benefit is applied.

What is whole life insurance?

Now, what is the whole life insurance definition? Whole life insurance is simply life insurance that is paid over a number of years, which can vary, that covers you for your entire life or up to 100 years old, in which you would receive your payout if you reached it. Is whole life insurance worth it?

Whole life insurance has been around since the early 1700s when members of the Amicable Society for a Perpetual Assurance Office teamed together to create funds that were paid to the families of the respective deceased each year. Since then, there have been many changes and additions to the world of life insurance.

So, if you’ve already answered what is term life insurance and what is universal life insurance, we will outline what whole life insurance can do differently.

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What is whole life insurance policy coverage?

So, now that you know what whole life insurance means, let’s talk about what is whole life insurance coverage? There are a number of different variables to be aware of before you finally select a whole life insurance policy. Most whole life insurance plans behave differently than term life insurance plans.

One major question to consider is if your whole life insurance plan is ordinary whole life or limited-payment whole life. Ordinary whole life insurance is typically paid over your entire lifespan whereas limited-payment whole life insurance is paid more like a term insurance plan.

If limited-payment plans act like a term plan, why wouldn’t I just choose a term life insurance plan? In short, once you finish paying your term life insurance plan, you have to purchase a new (more expensive) plan. With a limited-payment life insurance plan, you will pay for that term and still be covered for a lifetime, albeit with a higher rate during that term.

Whether you choose a limited-payment plan or an ordinary whole life insurance plan, there are still some other unique benefits of whole life insurance. It’s clear that there is a death benefit, or payout, for all life insurance plans. What’s different about whole life insurance is that it tends to carry cash value for the customer.

Whole life insurance offers more protection by providing the standard death benefit, interest, and cash value to serve as equity.

Many whole life insurance plans also build interest for the payee. Depending on the company, sometimes that interest can grow similarly to stocks, providing another source of income for those who invest.

Where can you find whole life insurance? Thankfully, there is no shortage of life insurance companies, totaling over 750 in 2018. While not each company will offer whole life insurance, it’s safe to say that you can find coverage fast.

Time is of the essence, so I’m sure you’ve wondered how you’ll know if a company offers whole life insurance. In modern times, essentially every company will inform you of their services via the internet, however, you can quickly get a quote to gauge the best life insurance companies using our free tool.

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Which is better: Term or whole life insurance?

The big question is: which life insurance policy is the best? Each customer’s personal, financial, and future situations will dictate which plan is best for them.

If you want it cheap and simple, you might prefer term life insurance. If you can invest in yourself and your beneficiaries, whole life insurance might be better for you.

For example, if you just got a new sales job and you aren’t certain what money you will bring in year-to-year, it may be wise to stick to the more cost-efficient term life insurance plans. You may want to take advantage of a whole life insurance calculator to help understand what rates you’ll pay.

On the other hand, if you are financially stable and have others that couldn’t survive without you, whole life insurance can easily become the more desirable option.

We get it, you probably still have a ton of questions still about whole Life Insurance. Quizlet may be able to provide some of those answers, but we plan to address most as you read on.

What is whole life insurance used for?

So, what is whole life insurance good for? Whole life insurance is like many other plans in the sense that it is designed to help protect our loved ones as we reach the afterlife. Whole life insurance also serves as equity as you continue to pay in over your life or a specified period of time.

It’s a little confusing that many whole life insurance policies are paid over a period of say, 30 years. How is that different from term life insurance? It’s kind of like buying a car versus leasing one.

When buying a car, you make payments for say, 7 years. After those seven years, you have no more payments to make and the car is yours! Whole life insurance works essentially the same way.

When leasing a car, you might also pay for 7 years, however, at the end of your 7 years you have to return the vehicle and either lease or buy another one. This means there are more payments coming your way, aka term life insurance.

The purpose of whole life insurance is not only to protect your beneficiaries but to also serve as an investment. Most whole life insurance plans have a cash value that is accessible under certain conditions.

Your premium is typically only partly for your actual insurance, while the rest may go into an “investment” fund that you can access as needed. This is one of the major reasons why monthly premiums tend to be higher for whole life insurance.

For those that are financially stable, whole life insurance can be very helpful to their beneficiaries. As money accrues it also builds interest, which can certainly add up when exceeding $100,000. Many people don’t realize their whole life insurance policy makes money for them.

All of the interest that accrues is also available to the policyholder or can be added on to the death benefit. At least you have comfort knowing your money doesn’t just disappear.

There are some other life insurance policies that are similar to whole life insurance. Universal life insurance is the most closely related as it is also a permanent life insurance policy but has more flexibility with payments and equity cannot typically go to the beneficiary.

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Who should consider whole life insurance?

Whole life insurance isn’t for everyone. As mentioned before, if you are financially stable and ready to invest in yourself and your family, whole life insurance is for you.

It’s also worth noting, if the money is available, that a person around 35 years old might sign up for a limited-payment policy over 30 years which would be ideal as payments subside near retirement.

In many cases, we pay life insurance for the remainder of our lives. Whole life insurance could be the difference of increasing your fortune to pass on to your family. This can be direct or by using your own dividends in the future for other investments.

It could also protect you in emergencies if you need a lump sum of cash 15 years down the road as it grows equity.

What are the benefits of whole life insurance?

In short, the benefits of whole life insurance include:

  • One constant payment rate for the duration of the term or lifespan
  • Cash value (Equity)
  • Interest-building

Basically, if you like investing and consistent payments, whole life insurance might be right for you.

What is whole life insurance cash value?

Still not sure what cash value is? Whole life insurance is unique compared to term life insurance because they have a “savings” component included. Usually, that savings can be used as a loan, cash, or simply to pay policies.

Think of cash value as a hidden interest-bearing savings account.

The way cash value accumulates for a policyholder is dependent on each company or the contract. In any case, the value should accumulate steadily over time unless the policyholder decides to utilize the cash as a loan, to pay premiums, or for other reasons.

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How to get whole life insurance

The majority of top life insurance companies offer whole life insurance. Whether you choose a market powerhouse like Northwestern Mutual or a subsidiary like Occidental Life Insurance Company, Business Wire shows there are endless life insurance providers available to you in a growing whole life insurance market.

If you are faithful to any one specific insurance company, you can certainly get a quote by calling its hotline or by using the website. It’s certain the company wants your business. If you just want the best whole life insurance policy for you, with any life insurance company, check out our FREE quote tool on this page.

Choosing the right whole life insurance policy may not be quite as simple as we have discussed so far. You will need to consider things such as exams, guaranteed policies, and payment terms prior to selecting a policy that sticks with you for your whole life.

No-exam & guaranteed-issue policies

No-exam policies are nice because you might get away with a cheaper rate, assuming you have an underlying health condition that you wouldn’t want your insurance company to know about.

That said, no-medical exam term life rates are typically a little higher than plans with an exam. This is just one of more than three reasons you should take a life insurance exam.

With whole life insurance, it is likely beneficial to invest in a guaranteed policy. Guaranteed life insurance policies are constant over time so they can’t randomly surprise you with a 20% increase per year. It’s safest to pick a policy with premiums you can predict.

More specific to whole life insurance is guaranteed cash-value clauses. Some plans might not guarantee the money you have invested in cash value. Again, we think it’s safest to go guaranteed.

What if my whole life insurance application is denied?

If your whole life insurance application is denied, there is likely a valid violation of the company’s life insurance underwriting guidelines. This could be a dangerous occupation, major health risk, or previous fraud.

While this denial shouldn’t directly impact your chances of being approved with another company, you could expect that your eventual approval will be at a higher rate than the average Joe.

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What to do if your application is denied?

Denials do happen, so what is the course of action in the event that you are denied? To start, you should have quoted multiple companies for whole life insurance. You can always apply with one of those other companies.

If you have been repeatedly denied for whole life insurance, it may be time to pursue similar options. For example, you may wish to apply for the more-flexible universal life insurance. Keep in mind that whole life insurance is a type of permanent life insurance.

What are the different kinds of permanent life insurance? As mentioned, we suggest whole life, universal life, and variable life, among others. It’s important that options like variable life insurance also provide coverage over your life and still have the investment quality.

Whole life insurance as an investment

Whole life insurance is an important option to consider for you and your beloved family members. If you have the resources, there’s no reason not to choose whole life insurance. You’ll want to know some of the whole life insurance pros and cons.

While there isn’t a wrong time to invest in life insurance, there are some times that are more pivotal than others. The National Association of Insurance Commissioners or NAIC encourages new parents to get whole life insurance if they are able. The NAIC, or National Association of Insurance Commissioners, is a leader in insurance analytics nationwide.

Why whole life insurance is a good investment?

Whole life insurance isn’t for everyone. You can choose to invest in stocks, or you might prefer whole life insurance as your investment source.

  • Builds cash value
  • Rates don’t change
  • Protects your beneficiaries

We all want security. Building cash value with consistent rates is key.

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Why whole life insurance is a bad idea

While whole life insurance is good for many things, it’s not for everyone. You can expect a few drawbacks.

  • More expensive than term life insurance
  • Can lose benefits if premiums aren’t paid
  • Lifetime commitment

If you don’t feel stable financially, it might not be smart to invest in a lifetime commitment to whole life insurance.

What is whole life insurance: What’s the bottom line?

As you can see, whole life insurance has a lot to offer. With any policy type, whole life insurance is not for everyone. If you are financially stable, have loved ones that can’t live without you, and are ready to invest, whole life insurance might be the best life insurance policy for you.

Now that you know what whole life insurance is, visit our FREE quote tool above to save now.


  1. https://www.businesswire.com/news/home/20191223005234/en/Global-Life-Insurance-Market-Report-2020-Market
  2. https://www.naic.org/documents/consumer_alert_baby_on_board.htm

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