What is whole life insurance?

Whole life insurance is a type of permanent life insurance that offers coverage for your entire life. As long as premiums are paid, the insurance company pays out a tax-free death benefit to your beneficiary, upon your passing away. Unlike term life insurance, whole life policies do not have an expiry date. The premiums (cost of insurance) for whole life policies are guaranteed and stay the same over your entire life.

Whole life insurance policies also have a savings or investment component. A part of the premiums you pay are invested by the insurance company and the investment returns are available for you to use as cash value. The cash value from a whole life policy can be used to supplement your retirement income or pay for children’s education or for any other purposes you may want to use it for.