What is whole life insurance?

If you’re the kind of person who doesn’t like to leave anything to chance, this article can show you how the lifetime coverage, fixed premiums, and guaranteed benefits of whole life insurance can help you—and your loved ones—feel secure about your legacy.

Young parents with their newborn baby

With whole life insurance, your insurance benefit is 100% guaranteed.1

When it comes to protecting your family’s lifestyle and future, whole life insurance is as dependable as any financial vehicle. That’s because this coverage offers a host of guaranteed benefits and features that make it a strong choice for anyone who wants to know that their protection will be there today, tomorrow—or whenever it is needed. Of course, a life insurance benefit depends on the timely payment of premiums.
 

Here’s what whole life offers:

  1. Guaranteed lifetime protection: Since the death benefit protection of whole life insurance is guaranteed for life, you can be sure that your loved ones will receive a lump-sum payment whenever you pass away. Best of all, beneficiaries typically do not pay federal income taxes on life insurance benefits, so they will be able to enjoy every penny of your gift.

  2. Guaranteed cash value growth: Cash value is a built-in accumulation component that you can use in an emergency or to help prepare for important financial events like college or retirement.2 With whole life insurance, your cash value builds at a guaranteed rate. You can check how much money you will have available at any given time. 

  3. Tax-free access to cash value: You can use your cash value anytime you like. While during the initial years of a policy, the cash value accumulation of the policy may be limited – there are no restrictions whatsoever. Best of all, any loans or withdrawals3 you make can be completely tax free, making it an extremely efficient way to set aside money for the future.

  4. Premiums guaranteed to never increase: With whole life insurance, your premiums are locked in at the time of purchase, so they are guaranteed never to go up due to your health, your age, or changes in the economy. 

How is whole life different from term life insurance?

As the name suggests, whole life insurance is designed to last your entire (whole) life—no matter how long you live. In contrast, term life policies have a limited duration (usually five to 20 years), often need to be renewed, and the premiums are usually adjusted as you age. Plus, whole life policies build cash value, while term life policies do not.

Protect your family. Prepare for the future.

Chances are your family has a lot of financial needs. Some are day-to-day needs like food, health care and housing, while others are long-term needs like preparing for college. With its guaranteed protection and cash value, whole life insurance can help with both. 

Here’s how whole life works:

First and foremost, whole life insurance provides valuable death benefit protection that will help preserve your family’s lifestyle in case you unexpectedly pass away. This protection begins the moment your policy is in force and continues right up to the day you pass away. In the meantime, your policy will gradually build cash value, giving you a tax-advantaged resource that you can use to meet future needs or to prepare for long-term goals like retirement. As a result, whole life insurance can help give families like yours financial security. 

In the long run, it’s a good value.

Since whole life insurance offers a wealth of benefits and features, it can be an excellent value for those who need long-term protection. But if you’re wondering how much it costs, you may be pleasantly surprised. Recent studies have shown that more than half of all Americans overestimate the cost of life insurance by as much as 300%.4 That’s why we recommend working with a New York Life agent. Together, you can review several rate quotes, discuss a variety of coverage options, and see which insurance solution fits your needs and budget. 

Does it matter when I purchase whole life insurance?

Since life insurance premiums are based, in part, on your age, there’s a good chance your rates for this coverage will never be lower than they are right now. So, if you want to lock in the lowest possible rates—and never have to worry about them going up in the future—the sooner you act the better off you’ll be.

We stand by our policies—and our policy owners.

While the quality of your insurance company is always important, it is especially important for long-term policies like whole life. Since you could be counting on this coverage for 20, 30—possibly even 50 years, you need to make sure the company you do business with will be there for you in good times and bad. At New York Life, we’ve been keeping our promises since 1845, and we continue to receive the highest ratings for financial strength currently awarded any U.S. life insurer.5

Frequently Asked Questions

While both types of coverage can be effective, the “better” policy is generally the one that meets your needs. If you prefer long-term protection and the security of guaranteed benefits, then whole life is probably a sound choice. On the other hand, term life insurance could be a better option if you need coverage for a limited time only.

Workplace coverage is important, but it may not give you all the benefits you need. Here are three important factors to consider:

  1. Most employer-sponsored policies are owned by the company, so if you change employers, you will most likely lose your coverage.
  2. Since most workplace policies offer term protection, your coverage will probably expire when you reach retirement age.
  3. Term life policies do not build cash value, so there is no saving component on most company-sponsored plans. 

While the rates for whole life insurance are initially higher than they are for term, whole life insurance may be more economical in the long run. That’s because whole life insurance never needs to be renewed, and your rates do not go up as you get older. 

Since there are pros and cons to any coverage, it really depends on your needs. For example:  If you need protection for a limited time—until a child graduates from college, for example, or until your mortgage is retired—whole life insurance may not be your most cost-effective option.

While there are a host of factors you should consider when selecting a life insurance policy, a whole life insurance policy is probably your best choice if you need (1) protection for 20 or more years, (2) want to be absolutely sure you can leave money to your loved ones, and (3) would find it comforting to know that you have another financial resource (cash value) that you can tap into if needed. 

We’re here to help.

If you have additional questions about whole life insurance, or would like to compare it with other alternatives, please visit any of the articles below, or contact your New York Life agent. Either way, you’ll be sure to receive the information and guidance you need to make an educated decision.

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Want to learn more about life insurance?

A New York Life financial professional can help determine what’s right for you.


The guarantees of life insurance are based solely on the claims-paying ability of the issuer. Guarantees remain in place as long as all premiums are paid. 
2 Accessing the cash value will reduce the available cash surrender value and death benefit.
3 Loans against your policy accrue interest and decrease the death benefit and available cash surrender value by the amount of the outstanding loan and interest. You can access cash value via loans or withdrawals through surrenders. When accessing cash value via loans, the total outstanding loan balance (which includes accrued loan interest) reduces your policy’s available cash surrender value and life insurance benefit. The amount you borrow will accrue interest daily. When taking a withdrawal through surrenders, you are surrendering any available Paid-Up Additional Insurance for its Cash Surrender Value. This means that your Policy’s Cash Value, available Cash Surrender Value and Death Benefit will be reduced by the amount of the withdrawal.  
4 2021 Insurance Barometer Study, LIMRA.com
5 Source: Independent Third-Party Ratings Reports as of 9/30/2021

New York Life Insurance Company is the issuer of New York Life Whole Life. In Oregon, the Whole Life policy form number is ICC18217-50P (4/18). SMRU # 1918014