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What are the Pros and Cons of Whole Life Insurance?

Whole life insurance can cover you for a lifetime, providing a death benefit payout to beneficiaries in the event of your passing. From great coverage to fixed premiums, this type of policy offers many benefits. But before you move forward with a policy, it’s a good idea to weigh the pros and cons. Here’s everything you need to know about what whole life insurance is, how it works, and the pros and cons of this policy.

What is whole life insurance?

Whole life insurance is a permanent policy that offers lifelong coverage. This means that it will pay out to your loved ones no matter when you pass away.

How whole life insurance works

Whole life insurance is designed to last your entire life. It will never expire as long as you continue to pay premiums, which will never change. In addition to a guaranteed death benefit for your beneficiaries, it can allow you to build cash value, which accrues interest over time. You may tap into the cash value while you’re still alive through a withdrawal, loan, or by surrendering the policy.1

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What are the pros and cons of whole life insurance?

Some noteworthy pros and cons of whole life insurance include:

Pro: Lifelong coverage

Whole life insurance lasts forever, no matter how old you are when you pass away. Unlike with a term life insurance policy, there is no expiration date.2

Pro: Fixed premiums

Once you receive a premium amount based on factors like your age and health status, you won’t have to worry about it changing. Your premiums will be set in stone, making it easy to budget for them.

Pro: Cash value growth

A whole life insurance policy offers a cash value growth component. As your cash value increases, you can withdraw funds or borrow against them to cover expenses or meet financial goals.3

Pro: Dividends

Depending on the company you choose, whole life insurance may be eligible for dividends, which you can redeem for cash.3 Dividends depend on the company’s financial performance, interest rates, and investment returns.

Con: Complexity

Compared to other types of life insurance, whole life insurance can be complex and more difficult to understand. You may need to review your policy multiple times or speak to a company representative to ensure you know how it works.

Con: Higher premiums

Due to the lifelong coverage and cash value component, whole life insurance comes with higher premiums.2 It may be a challenge to cover them if you’re young or don’t have a lot of extra cash at your disposal.

How whole life insurance compares to other permanent life insurance policies

Now that you know how whole life insurance works and the pros and cons, here’s a brief look at the differences between this type of policy and other permanent policies you might come across:

  • Universal life insurance: Universal life insurance lets you change your premiums and death benefit if you need to. With whole life insurance, however, your premiums and death benefit stay the same.
  • Variable life insurance: With variable life insurance, you can enjoy access to many investment options and choose the ones that meet your investment risk tolerance and goals2. Whole life insurance doesn’t offer this type of flexibility.
  • Final expense insurance: Final expense life insurance may help your beneficiaries with end-of-life expenses, like burial costs and medical bills. It usually provides less coverage than a traditional whole life policy.

How to get a whole life insurance policy

If you’re interested in whole life insurance from Aflac, follow these steps:

1. Fill out a short online form.
2. Wait for an Aflac representative to call you and discuss your options.

You can also start the process via phone and call Aflac directly at 1-855-782-5850.

Should I get whole life insurance?

In these situations, a whole life insurance policy may make sense:

You want lifelong coverage

Since whole life insurance is permanent, it can be a good option if you want protection that lasts a lifetime. A whole life policy can give you long-term financial security.

You don’t want to dip into savings

Thanks to the cash value component, whole life insurance premiums can grow into a tax-deferred account. This can help give you the chance to pass down more to your beneficiaries. For example, you can tap into it while you’re still alive to help pay for your children’s college education.

Get a whole life insurance policy

Whole life insurance offers many pros and cons that you should consider when deciding whether this policy is right for you. If you want lifelong coverage, Aflac offers wwhole life insurance with less expensive premiums that won’t change over time. This type of policy also comes with a cash value account that may grow tax-free and lasts your entire life. Chat with an agent to discuss your options and get a quote today.

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