Policy Types

Understanding Whole Life Insurance

When choosing life insurance coverage, Whole Life (permanent/cash value) could be for you if you have family health issues, a child with special needs, estate concerns or are a partner in a business.

Do You Need Whole Life Insurance?

Have you ever mentioned to a friend or family member that you've been thinking about buying life insurance? If so, then you've probably received a lot of advice about whether to buy term life versus whole life insurance.

The fact is, both term and whole life insurance will pay a specified amount to your beneficiaries when you die. However, whole life insurance can often provide you with a bit more flexibility and benefit options - especially if you think you'll need to use the policy benefits for a specific purpose.

A Checklist for Considering Whole Life. Do you:

… Have family health issues?

Many whole life policies come with a guaranteed insurability rider that allows you to buy additional life insurance at a later date (such as every five years or at certain ages) without being subject to a health exam. This can be a worthwhile benefit to include in a life insurance policy if you have reason to believe that your health might change in the future, or if you have medical problems in your family.*

… Have a child with special needs?

Caring for the needs of a child with a disability can be a lifelong responsibility. Because whole life is permanent (as long as required premiums are timely paid), and you can't outlive your policy, you can ensure that funds will be available to take care of a special needs child when you can't.

… Have estate tax concerns?

Will your family be left with federal or estate taxes after you die? Purchasing a whole life insurance policy and designating your heirs as beneficiaries is one way to provide the cash your family can use to pay such taxes. This could help prevent them from having to sell off the assets in your estate in order to pay the tax man.

… Have a business that you're part owner in?

If you're a co-owner or partner in a business, you might consider using whole life insurance to fund a buy/sell agreement. Simply stated, a buy/sell agreement is when each business owner purchases a life insurance policy on each of the other owners. When an owner dies, the surviving owner uses the death benefit to purchase the deceased owner's share of the business. In this situation, whole life insurance works better than term because it's a permanent policy and won't expire after a specific period of time as long as the required premium payments are timely made.

Whether to purchase a whole life policy (and determining how much to purchase) is a personal choice that begins with the question, “ How much life insurance do I need?

* The base policy is subject to underwriting and may require an initial health exam to determine eligibility. Guaranteed Insurability Riders are typically only available at policy issuance.

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Whole Life Insurance

Whole life insurance is a specific type of policy that can provide specific benefits to meet specific concerns. It is important to understand possible options and how they may or may not be right for you. This article helps you determine if it makes sense for you to consider a whole life insurance policy. For more information, visit our learning center.


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 is 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.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by 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.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.

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