5 reasons to consider whole life insurance (2024)

Whole life insurance is a powerful financial tool for you and your family. Here are five reasons why you may want to add whole life insurance to your financial portfolio.

1.Whole life insurance can protect your family

Whole life insurance offers death benefit protection that can keep your family financially secure in case you pass away. And because you are fully protected with your first payment, it can also be a good way to leverage your money.

2. Whole life insurance allows you to pursue cash value growth that is not subject to market risk

Whole life insurance has guaranteed cash value growth1 that builds at a steady, dependable pace. That allows it to complement fixed-income investments in your portfolio. New York Life offers the ability to customize your policy by setting a premium-paying period to pay up your policy faster and accelerate cash value growth.

3. Set up a replacement for your human capital with whole life insurance

Your portfolio growth is highly dependent on future contributions. Whole life insurance is a fail-proof way to arrange for the replacement of your "human capital" if you’re no longer around to provide for your family. Your human capital consists of the wages, benefits, Social Security, and any other unrealized forms of compensation that you would customarily expect to receive in the future.

4. Whole life insurance is a good solution for retirement and for safeguarding your assets

Whole life policies are guaranteed to build cash value over time, and this cash value can help you pay for big-ticket items like a new home or launching a business. Upon retirement, when your life insurance needs decrease, you can use that money to supplement your income during down markets. Instead of selling off portions of your portfolio when prices are depressed, you can use your policy's cash value while the market is down, giving your other assets time to recover.2

5. Whole life insurance is great for 'reinvesting' your dividends

One of the benefits of purchasing whole life coverage from a mutual company is that you will be eligible to receive dividends,3 if declared. Many policy owners use their dividends to purchase additional coverage (through paid-up additions), which provides more death benefit protection, more cash value accumulation, and more dividend-earning potential. If you prefer, however, you can simply take your dividends in cash or use them to pay future premiums.

Frequently asked questions

New York Life Insurance Company is the issuer of New York Life Whole Life. In Oregon, the Whole Life policy form number is ICC18217-50P (4/18). SMRU #5013801

1The premium quoted is for a 35-year-old male, rated select-preferred, paying monthly recurring premiums on a Whole Life (AD 117) policy with a $250,000 face amount and no riders. Your premiums may differ. Other rate classes are available. Life insurance applications are subject to underwriting. Premiums are guaranteed for the life of the policy

2Guarantees are based upon the claims paying ability of the issuer.

3Accessing cash value will reduce death benefit and available cash surrender value.

4Guarantees are based upon the claims paying ability of the issuer.

5 reasons to consider whole life insurance (2024)


What are the arguments for whole life insurance? ›

While the premium is more expensive than for term life insurance, the list of whole life insurance advantages is significant:
  • Your whole life premium stays the same for life. ...
  • You build cash value at a guaranteed rate. ...
  • Your death benefit is guaranteed. ...
  • You may receive dividends.

What is a major benefit of a whole life insurance policy? ›

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.

What is one reason to own a whole life insurance policy? ›

Whole life policies are guaranteed to build cash value over time, and this cash value can help you pay for big-ticket items like a new home or launching a business. Upon retirement, when your life insurance needs decrease, you can use that money to supplement your income during down markets.

What are the top 3 reasons for life insurance? ›

According to a recent NerdWallet study, the most common reason Americans buy life insurance is to cover final expenses. The second most commonly selected reason is to leave an inheritance, followed by covering large debts, replacing an income and building an investment.

How to take advantage of whole life insurance? ›

4 ways to use whole life insurance as an investment
  1. Withdraw or take a loan on the cash value. ...
  2. Create generational wealth. ...
  3. Collect dividends. ...
  4. Surrender the policy (but only if you no longer need it)
Sep 6, 2023

Why choose whole life insurance over term life insurance? ›

Whole Life insurance Pros: The premiums will always be the same amount, the payout is guaranteed (subject to limitations and exclusions), and the value of your plan grows at a constant rate. Whole Life Insurance Cons: You cannot choose the length of the policy and it's typically more expensive than term life insurance.

What is the downside of whole life insurance? ›

A more complex product than term life insurance. Higher premiums than term life insurance. Could be costly if coverage lapses early.

Who would benefit from whole life insurance? ›

For people with long-term financial goals that include providing a death benefit for their beneficiaries, whole life insurance is worth considering. While premiums may be higher than term life insurance, the lifelong coverage provides the necessary coverage along with the potential for cash value growth.

Why do millionaires get whole life insurance? ›

Wealthy individuals with a net worth over $1 million can use life insurance to provide for their loved ones in the event of their death, as an investment vehicle, or as protection against estate taxes.

What are the 3 P's of life insurance? ›

A television commercial selling life insurance speaks about three Ps that all focus on one aspect of their policies… price, price and price. It is an easily understood and remembered sales tool, although the substance, value and need for the product is not included in the tag line.

What is the major problem with life insurance? ›

Cons of life insurance

One disadvantage of life insurance is that the older you are, the more you'll pay for a policy. This is because you're more likely to pass away during the policy period than a younger policyholder and will, in turn, cost the life insurance company more money.

What are 3 reasons you may be denied from having life insurance? ›

They can include engaging in risky hobbies and behaviors like skydiving; having a history of DUIs or speeding tickets; having a dangerous job like roofing; having a criminal record or a less than ideal financial history; being a smoker; and failing a drug test.

What is the biggest risk for whole life insurance? ›

One of the most notable risks of Whole Life Insurance is its cost. The premiums associated with whole-life policies tend to be significantly higher compared to those of Term Life Insurance. The reason behind this lies in the policy's structure, which combines a death benefit with savings or cash value accumulation.

How long does it take for whole life insurance to build cash value? ›

A whole life insurance policy will begin building cash value as soon as you pay your first premium, and it will continue building throughout the life of the policy as long as there are funds in the account.

Are there tax advantages to whole life insurance? ›

Tax-advantaged growth

The cash value of your whole life insurance policy will not be taxed while it's growing. This is known as “tax deferred,” and it means that your money grows faster because it's not being reduced by taxes each year. This means the interest you make on your cash value is applied to a higher amount.


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