What is Whole Life Insurance? 

If you want life insurance that lasts your entire life and builds value, you'll want to take a look at whole life insurance. Whole life insurance is a policy that offers lifelong coverage, consistent premiums and a guaranteed return on the policy’s cash value.

• Want a consistent premium 
• Want a policy that does not stop at a certain amount of time
• Want a guaranteed return on the cash value that builds up within the policy.

Here’s an overview of the largest sellers of whole life insurance:

This is a question that only you can answer. Get started by speaking with an agent or financial advisor to learn more.  

Whole life insurance is perfect for some people, while term life insurance is sufficient for others.

Term life insurance, has no cash value and ends after a length of time you choose such as 5,10, 15, 20, 25,30, 40, ect . typically has much lower premiums than whole life insurance.

If you need term life instead? Get term life insurance quotes  

To decide which type of insurance is best for you, consult a fee-only financial advisor, if possible. These advisors don’t make commissions from sales, so they can recommend financial products objectively.

To decide which type of insurance is best for you, consult a financial advisor, life insurance agent, or simply determine what you need based on research. If whole life insurance is right for you, these tips will help you find the best policy.

Look up the financial strength rating of each whole life insurer you’re considering. You can find financial information through a rating firm such as A.M. Best.

Financial strength is important because a strong company has a better chance of being around decades from now to pay claims.

Any company with an A.M. Best rating of B+ or higher has a good ability to meet its obligations, in A.M. Best’s opinion. NerdWallet typically recommends considering insurers with ratings of A- or higher. Companies with ratings below that may not be quite as safe a bet and often have higher rates of complaints relative to their size.

All of the largest life insurance companies, for example, have solid financial strength ratings.

You can look up an insurer’s financial statement data on the National Association of Insurance Commissioners website. The score is based on the number of complaints filed against the insurance company with state regulators, adjusted for the company’s market share (based on premiums written). The average is 1, so a score higher than 1 means the company received more complaints than expected for its size.

To find the right coverage amount when you’re buying whole life insurance, decide what you want the policy to accomplish. A small policy may pay for college, mortgage, or whatever else you may want. If you have greater needs, you'll want to calculate them and multiply by how long you would want to cover.

Not all sellers of whole life insurance offer policies in small amounts of coverage such as Gerber Life, and those that market small policies don’t always sell large ones.

Riders are coverage features you can add to a life insurance policy, usually for an extra cost. Examples include a chronic illness rider, which lets you access some of the death benefit if you have a serious illness, and a “disability waiver of premium” rider, which lets you skip payments if you become disabled.

Some companies offer an accelerated death benefit rider for no extra premium. This provision allows you to tap part of the death benefit if you become terminally ill.

Whole life insurance policies feature a “cash value” savings account. A portion of your premium is invested in the account, which typically grows slowly on a tax-deferred basis. You can borrow against the cash value, use it to buy more coverage or surrender the policy for the cash. (The death benefit is reduced if you don’t repay a loan, and it disappears if you surrender the policy.)

Life insurance companies provide illustrations of how each policy’s cash value could perform. Always ask which parts of the illustration are guaranteed. For example, an insurer may give cash value projections based on the payment of dividends, which aren’t guaranteed.

There are three main types of approval processes.

• Fully underwritten life insurance typically involves filling out a lengthy application and taking a life insurance medical exam.
• Simplified-issue life insurance involves answering some health questions, but there’s no medical exam.
• Guaranteed-issue insurance means you’ll be accepted with no medical exam and no health questions. 

If you have health issues, you still have a chance of getting a fully underwritten policy. Companies rate potential customers differently so shop around. The value of a fully underwritten policy is the potential of a lower price per month.  

Simplified-issue and guaranteed-issue policies are worth considering if you’ve been turned down for fully underwritten (standard life insurance) due to health problems, but beware of the downsides. The death benefits offered are relatively small, and the costs per $1,000 of coverage are higher than for policies that require a medical exam. In addition, these policies don’t pay the full death benefit if you die within the first few years of coverage.