What is whole life insurance?

It is generally the most expensive form of life insurance due to it’s permanent nature and because premiums remain level.   Ideal situations for whole life insurance are usually for smaller face amount plans as with Burial Insurance/Final Expense Life Insurance. 

Whole life insurance plans build some cash value over time but they’re not as transparent as the other popular form of permanent life insurance—Universal Life Insurance.   It’s not always required that whole life plans are fully illustrated by the agent which means you don’t know where all your money is going.  Some of your premium is going to pay the death benefit when you die… some is earning interest to build cash value… but what about fees and commissions?  Since state regulatory bodies don’t always require whole life plans to be illustrated—it can be a mystery how your money is going to work for you over time.  Since they are more expensive—whole life insurance has decreased in popularity over the years.  But this doesn’t mean it can’t make a good addition to a life insurance portfolio on a smaller scale.