Whole life insurance is a type of life insurance policy that provides coverage for the entire duration of the insured individual’s life, as long as the premiums are paid. It is sometimes referred to as permanent life insurance because it does not have a specific term or expiration date like term life insurance.

Here are some key features of whole life insurance:

1. Lifetime coverage: Whole life insurance guarantees coverage for the entire lifetime of the insured, as long as the premiums are paid. This means that whenever the insured passes away, the policy pays out a death benefit to the designated beneficiaries.
2. Cash value component: Whole life insurance policies also have a cash value component, which grows over time. A portion of the premiums paid goes towards the cash value, which accumulates on a tax-deferred basis. The policyholder can access this cash value through policy loans or withdrawals during their lifetime.
3. Fixed premiums: Whole life insurance typically has level premiums that remain fixed throughout the life of the policy. The premiums are higher than those of term life insurance, but they remain constant, regardless of changes in the insured’s health or age.
4. Death benefit: The death benefit is the amount of money that is paid out to the beneficiaries upon the death of the insured. It is usually a tax-free lump sum and can be used by the beneficiaries to cover funeral expenses, debts, income replacement, or any other financial needs.
5. Dividends (optional): Some whole life insurance policies offer the potential to receive dividends. These are not guaranteed, but if the insurance company performs well, policyholders may receive dividends, which can be taken as cash, used to reduce premiums, or reinvested to increase the policy’s cash value or death benefit.
6. Estate planning and tax advantages: Whole life insurance can be used as an estate planning tool, allowing policyholders to leave a tax-free inheritance to their beneficiaries. The death benefit bypasses the probate process and generally receives favorable tax treatment.

It’s important to note that whole life insurance can be more expensive than term life insurance due to its lifelong coverage and cash value component. It is typically recommended for individuals who have a long-term need for life insurance coverage, estate planning goals, or those who want a policy that builds cash value over time. Consulting with a financial advisor or insurance professional can help determine if whole life insurance is suitable for your specific needs.