Whole life insurance offers lifetime coverage and builds cash value, but not all policies are created equal. Read about our top provider picks below.
Based on our research, we recommend TruStage our top whole life insurance provider. With multiple options to get a policy without undergoing a medical exam, Fidelity Life can be a good choice for those who have trouble getting approved for permanent life policies due to age or medical issues. The provider also offers a range of optional add-ons to customize your policy, which can be ideal if you’re looking for more comprehensive coverage.
Compare Top Whole Life Insurance Providers
Company | BBB Rating | Best For | Monthly Cost | Visit Site |
---|---|---|---|---|
A+ | Our pick for no-exam coverage | $18-$36 | Get Quote | |
A+ | Our pick for whole life coverage | $83-$155 | Get Quote | |
A+ | Our pick for accidental death coverage | $21-$40 | Get Quote | |
A+ | Our pick for bundling insurance | $21-$35 | Our Review | |
A+ | Our pick for accelerated death benefits | $18-$40 | Our Review | |
A+ | Our pick for customer satisfaction | N/A | Our Review | |
N/A | Our pick for fast claims | $23-$47 | ||
N/A | Our pick for a personalized experience | $20-$37 | ||
N/A | Our pick for custom coverage | $18-$42 | Visit Site |
Company | BBB Rating | Best For | Monthly Cost | Visit Site |
---|---|---|---|---|
A+ | Our pick for no-exam coverage | $18-$36 | Get Quote | |
A+ | Our pick for whole life coverage | $83-$155 | Get Quote | |
A+ | Our pick for accidental death coverage | $21-$40 | Get Quote | |
A+ | Our pick for bundling insurance | $21-$35 | Our Review | |
A+ | Our pick for accelerated death benefits | $18-$40 | Our Review | |
A+ | Our pick for customer satisfaction | N/A | Our Review | |
N/A | Our pick for fast claims | $23-$47 | ||
N/A | Our pick for a personalized experience | $20-$37 | ||
N/A | Our pick for custom coverage | $18-$42 | Visit Site |
We based cost data on quotes collected for 35- and 45-year-old men and women without a history of tobacco use seeking $250,000 in coverage.
Top 9 Whole Life Insurance Companies
These are our picks for the seven best life insurance companies for whole life policies
- Ethos: Our top pick
- TruStage: Our pick for whole life coverage
- Fidelity Life: Our pick for accidental death coverage
- Nationwide: Our pick for bundling insurance
- Mutual of Omaha: Our pick for accelerated death benefits
- State Farm: Our pick for customer satisfaction
- Transamerica: Our pick for fast claims
- Northwestern Mutual: Our pick for a personalized experience
- Penn Mutual: Our pick for custom coverage
Life Insurance Cost Calculator
Types of Permanent Life Insurance Policies
Permanent life insurance coverage lasts for the policyholder’s life, as long as premiums remain to date. When the insured person dies, the insurance provider makes a death benefit payout to their named beneficiaries.
You can also use permanent life insurance as a source of financial security while you are still alive. A portion of premiums paid into permanent life insurance policies is allocated to a cash value component. Cash value can be invested, withdrawn or borrowed against, depending on the policy type and other restrictions.
There are various policy types under the permanent life insurance umbrella, including whole, indexed, variable and universal coverage.
Whole Life Insurance
Whole life insurance premiums are level and do not change over time. The cash value of your policy is also guaranteed to grow at a specific annual rate. Like all permanent life insurance policies, a whole life insurance policy’s death benefit is paid when the insured person dies, as long as the premiums are paid.
Universal Life Insurance
Universal life insurance, another type of permanent life insurance policy, allows for flexibility in the premium payment amount and death benefit. Instead of agreeing to a fixed premium rate and guaranteed cash value growth as with a whole life insurance policy, you can make adjustments — subject to limitations — according to your needs.
There are several types of universal life insurance policies, and they differ by how cash value grows. Generally, universal life insurance policies do not guarantee cash value growth. Instead, cash value growth depends on market conditions. In some cases, losses can occur.
Variable Life Insurance
If you want to use your life insurance’s cash value component as an investment vehicle, variable life insurance could be right for you. Unlike many other life insurance policies, variable life insurance allows policyholders to invest their premium payments in a range of investment options.
The policy's cash value is directly linked to the performance of these investments. So, your cash value can grow at a rate higher than what’s guaranteed by a whole life insurance policy. On the other hand, you risk a loss of your initial investment. Providers sometimes limit investment losses by implementing a floor that can save you from a catastrophic financial loss.
Like whole life insurance, variable life insurance premiums remain level.
Variable Universal Life Insurance
Variable universal life insurance is a more complex type of coverage that combines the features of both variable and universal life policies. These policies allow you to adjust your premium payment and death benefit amounts in addition to allowing you to invest your cash value in a range of investment options.
Indexed Universal Life Insurance
Indexed universal life insurance invests the policy’s cash value portion into an index. Common stock indexes used by life insurance companies include the Standard and Poor’s 500 and the Nasdaq Composite.
While indexed universal life policies provide a guaranteed minimum interest rate on the cash value, the potential for higher returns comes from interest earned on the performance of your chosen stock index.
Policyholders can benefit from market gains while being shielded from losses, an appealing option for those who seek some level of investment opportunity combined with the security of a life insurance policy. However, market gains are often capped, limiting your upside.
How Does Whole Life Insurance Work?
Whole life insurance is a type of permanent life insurance protection that pays a death benefit to beneficiaries no matter when the insured person dies, as long as premiums are paid. Beneficiaries can use the funds from the insured’s life insurance payment for any purpose.
Whole life insurance policies build cash value, which the policyholder can access through withdrawals and loans. Every time you pay a premium, your life insurance company will allocate a portion of it into an account that you can withdraw from or take out a loan while you are still alive. The cash value is guaranteed to grow tax-deferred at a specified rate.
Factors That Affect the Cost of Life Insurance
Life insurance companies don’t just look at the amount of coverage when setting life insurance premiums. Providers underwrite policies based on factors about the individual applicant, such as their age, gender, health and other potential risk factors. Here are common considerations carriers take when underwriting life insurance policies:
- Age: As you age, your risk of death increases, which makes it more likely that a claim will be filed on your policy.
- Gender: Women have a longer life expectancy than men and generally pay less for life insurance as a result.
- Health: Your health is a major factor in your life insurance premiums. Providers may ask you about your medical history or request that you take a medical exam to determine your risk level.
- Pre-existing or chronic conditions: When you apply for life insurance, you’ll have to disclose chronic illnesses such as diabetes, heart disease, cancer or sexually transmitted diseases. If you are affected by pre-existing conditions, you may be placed in a higher-risk pool at a greater cost or even excluded from coverage.
- Lifestyle: If you engage in smoking, excessive drinking or other unhealthy lifestyle behaviors, it may negatively impact your premiums.
- Dangerous hobbies: Some activities put you at an increased risk of death. Dangerous hobbies such as skydiving, skiing or rock climbing increase your beneficiary’s likelihood of filing a claim against your policy and, therefore, your premiums.
- Driving record: If your driving record includes accidents, DWI/DUI citations, claims, or tickets, your life insurance cost may increase.
- Location: Companies use regional mortality rates and life expectancy data to factor geographical risk into your life insurance rates.
Is Whole Life Insurance Worth It?
Whole life insurance guarantees a death benefit so long as you pay the policy premiums, and it accumulates cash value as a living benefit that you can withdraw or borrow against. However, it’s substantially more expensive than term life insurance. So, is whole life insurance worth it?
Permanent life insurance lasts for your entire life — as long as you pay the policy’s premiums. It also accumulates cash value, which the policyholder can access before they die. This additional investment component can make whole life policies a smart choice if you want to supplement your retirement funds or have complex financial obligations.
If anyone depends on your income or you want to guarantee a payout to cover your end-of-life costs no matter when you die, whole life insurance is likely worth it. If you have no lifelong dependents, your significant financial obligations (like a mortgage or paying for college) have been met and you have no debt, you may want to reconsider buying whole life insurance.
Our Conclusion About the Best Whole Life Insurance Providers
Life insurance can provide the peace of mind that your loved ones will be supported when you're gone. If you want level premiums and a guaranteed death benefit for your beneficiaries, and budget isn’t a concern, a whole life insurance policy is a great option. But everyone has a unique financial situation and not all policies are right for everyone.
Because a whole life contract can last for decades and can be costly to surrender, it’s crucial to find the right policy for you. We gathered our picks for the best whole life insurance companies in this article and recommend that you compare quotes from at least three providers before deciding.
Frequently Asked Questions About Whole Life Insurance
There is no ideal age to buy whole life insurance, but there are factors that impact which policy you should buy, like your dependents and financial obligations. That said, it’s usually better to buy a whole life policy when you’re younger, as you can lock in lower premiums that won’t increase for the rest of your life.
There are a few major differences between whole life insurance and term insurance. Whole life offers lifelong coverage, and term insurance covers you for a finite period of time, known as a term. Whole life insurance also builds cash value and is more expensive.
Whole life insurance aims to provide a guaranteed death benefit for as long as premiums are paid and build cash value that the insured can use before they die. Its higher limits make it good for leaving behind an estate, replacing a lost income or covering lifelong financial obligations or debt.
Yes, whole life insurance has a cash value component. There is less flexibility and potential for growth than universal life cash value, but it features a fixed interest rate and guaranteed growth.