Whole life insurance comes in many varieties, but the most popular is level-premium, level death benefit insurance. The greatest advantage of whole life insurance is its guarantees. In other words, as long as the policy owner pays his or her premiums, the policy is guaranteed to be there. In addition, the policy's cash values are not subject to the market risks associated with some other permanent life insurance products or investments like mutual funds. The cash values of a whole life policy may be available to the policy owner via policy loans or if the policy is surrendered by the policy owner.
Some whole life is known as participating.
This means policy owners participate in the favorable experience of the life insurance company through dividends. When dividends are paid, the policy owner may be given a choice of several different ways to use the dividends. For instance, they could be used to reduce current premiums, to purchase additional insurance, or to repay policy loans. With its strong guarantees, whole life insurance is good for the person who wants to be sure the policy is there, regardless of when death occurs. Whole life insurance is easy to understand, and it's an excellent choice for the individual who desires a disciplined approach to purchasing life insurance.