Policy Types

Whole Life Insurance Rates

Whole life insurance typically costs more than term insurance, but there are additional benefits you receive for that extra cost, such as access to the policy's accumulated cash value.

Whole Life Insurance Rates: Are The Premiums Worth The Extra Cost?

As a life insurance policy, whole life insurance is meant to provide your loved ones a degree of financial security by way of a death benefit. If you were to die unexpectedly, your whole life insurance policy could help the beneficiaries pay for thing such as final expenses, medical bills, living expenses, mortgage payments, and other debts. However, if you’ve been doing some comparison shopping, you may have discovered that the cost of whole life insurance can be much higher than term life. But is paying the extra cost for whole life worth it?

When people talk about the benefits of paying less expensive premiums for term life insurance, it’s often because they may not fully understand how whole life insurance works and appreciate what it has to offer. Of course, the best life insurance policy is the one that fits your individual needs and budget, which is why it’s important to understand how different life insurance policies work.

How whole life works

As a type of permanent life insurance, whole life is structured to last your entire life. As long as you keep paying the premiums, the policy will be in force regardless of your age and health. This is just one of the advantages of whole life, and why whole life insurance premiums can typically be much higher that term life.

Another advantage of whole life insurance is that your premiums won’t ever increase as long as you continue to pay them and don’t allow your policy to lapse. This alone can be worth the extra premium dollars. As you become older, and as your health changes, the life insurance company is taking on more risk and consequently, must increase the cost of premiums. With whole life, even if your health took a turn for the worse your cost won’t change. In fact, once your policy is in place, your insurance is guaranteed for the rest of your life as long as premiums are being paid.

Whole life insurance also includes a component that has the potential to accumulate cash value over time. As this cash value grows, you can access the accumulated cash value portion of your money at any time, for any reason. Compared to other types of savings accounts (such as 401(k)s and IRAs) that penalize you if you take money out early and don’t pay it back by a certain time, a whole life policy allows you access to any cash accumulation your policy may have, without all the obstacles. You can either leave your cash alone or borrow from it – the choice is yours. However, keep in mind that loans against the policy will accrue interest and decrease the death benefit and cash value.

These are just a few of the reason why paying for a whole life policy may be worth shelling out the additional premium dollars. If you want to learn more about whole life insurance and other types of life insurance, visit the Protective Learning Center.

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax‐related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Whole Life Insurance Rates

For some people, term life insurance rates may be more appealing than whole life insurance rates. But while whole life insurance rates are typically much higher than term life, the additional benefits may be worth the extra cost. This article looks at just a few of the key advantages of whole life insurance and why paying for higher premiums may be worth it. Protective life explains the cost of whole life insurance and why it may be right for you..