5 Questions to Ask When Considering Whole Life Insurance

A young woman smiles after learning what types of questions she should consider when shopping for whole life insurance.

When shopping for life insurance, there’s a chance you’ll consider both term and whole life insurance policies. While term life insurance is often the more affordable option, whole life insurance can give you a set amount of coverage—determined by you—for as long as you live. It’s a good idea when considering life insurance to weigh out your options, so we put together some of the top questions to ask about whole life insurance policies. 

1. Is whole life insurance or term life insurance a better option for me?

Both term life insurance and whole life insurance have their advantages and considerations. Our term life insurance vs. whole life insurance guide can help you better understand the two types of life insurance and weigh your options, but whole life insurance might be the right fit for you if:

  • You’re looking for lifetime life insurance coverage.
  • You’re the parent or guardian or a special-needs child.
  • You’re hoping to provide an inheritance when you pass.
  • You want to maximize a pension.
  • You have a high net worth.
  • Your budget allows for more expensive premiums.

2. Can I afford whole life insurance premiums?

Whole life insurance often costs much more than term life insurance due to the cash value savings account that it provides. Additionally, whole life insurance interest rates and death benefits are guaranteed for as long as you live. You might be able to receive a discount on a whole life insurance policy by paying an annual premium instead of monthly, but at the end of the day, the cost of whole life insurance is often significantly higher due to the benefits that come with it. If you’re looking to buy whole life insurance, it’s important to weigh your options and ensure you’re able to pay the higher monthly premiums that come with it. 

3. Do I need a permanent death benefit?

You may want to consider a permanent death benefit if the needs of your loved ones cannot be met by the benefits of a term life insurance policy. A permanent death benefit is typically favored when:

  • You have an estate or inheritance that your family would be expected to pay taxes on if the unexpected were to happen to you.
  • You’re a parent or guardian of a special needs child that is dependent upon your income.
  • You are a business owner and want to ensure your business partners/beneficiaries are able to continue running said business upon your passing.

4. How much whole life insurance coverage do you need?

How much whole life insurance coverage you need will depend on your long-term financial responsibilities, who is dependent on your income, the cost of final expenses and more. Our life insurance calculator is a good place to start when trying to figure out how much coverage is right for you and your family. 

5. Do I understand the cash value of a whole life insurance policy?

One of the main advantages of a whole policy is the cash value, which increases each time you pay into your policy. You can oftentimes borrow against the whole life insurance cash value tax-free or cancel your coverage to receive all or part of the cash value once it reaches a certain amount. It takes many years to build up a substantial cash value, though, and if you were to ever decide you can no longer afford the policy, you could potentially be out of that money with little to no cash value to take with you. 

SelectQuote Can Help Answer Your Whole Life Insurance Policy Questions

Understanding the benefits of different types of life insurance can seem overwhelming, but at SelectQuote, we can help. Whether you have questions to ask about whole life insurance policies or are looking into your options, we can compare coverage and costs from some of the most trusted life insurance companies in just minutes.

We do the shopping. You do the saving.