What Are The Uses Of Whole Life Insurance? 
Whole life policies are well suited for needs that do not diminish over time . Some commonly found uses for whole life are : Family protection : To provide funds to support a surviving spouse and/or minor children , particularly for individuals who start a family later in life ; to pay final bills , such as medical or other estate expenses and federal and state death taxes . Business planning : Whole life insurance is often used for many different business purposes , such as insuring key employees , in split-dollar insurance arrangements , and funding non-qualified deferred compensation plans . Business continuation planning often involves using whole life insurance as a source of funds for buy-sell agreements . Accumulation needs : Some individuals will use the cash value feature of whole life as a way of accumulating funds for specific purposes , such as funding college education , or as a supplemental source of retirement income . Charitable gifts : To provide funds for a gift to charity . Whole life insurance , sometimes called permanent insurance , or ordinary life , is designed to stay in force throughout ones lifetime . As long as the policy owner meets his or her obligations under the policy , the policy remains in force , regardless of any changes in health that may occur . Unlike term insurance , where premium payments generally increase , as the insured gets older -LRB- the chance of death increases with age -RRB- , premiums for most whole life policies remain level . A portion of each premium payment is set aside to earn interest . Over time , a whole life policy will develop cash values . The accumulated cash values form a reserve which enable the insurer to pay a policys full death benefit , while keeping premiums level . During life , many whole life policies have provisions to borrow a portion of the accumulated cash value . If a policy is terminated without the insured dying , there are various surrender options for the cash value available to a policy owner . Steve Savant is a contributor to Back Room Technician , an Advisys Company 