Compare whole life insurance: 2021 rates | finder.com

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Compare whole life insurance

Get whole life insurance quotes to protect your family's finances and build a cash asset over time.

This article was reviewed by Andrew Flueckiger, a member of the Finder Editorial Review Board and certified insurance counselor and licensed insurance agent in five states.

Whole life insurance works well if you want a lifelong policy that builds cash value at a fixed interest rate of return, and monthly premiums that stay the same. When comparing policies, look for low premiums on high coverage such as $500,000 or more, with above-average guaranteed rates of return — like 2%. To help you narrow down your whole life policy options, our experts spent over 500 hours researching 100+ life insurance companies and their prices and policy features.

Compare whole life insurance quotes

Click “Compare” to see companies and their policy features side-by-side, then get a quote from your top picks.

Data updated regularly
Name Product Issue Age Minimum Coverage Maximum Coverage
Policygenius
18 to 85
$50,000
$100,000
Compare 12+ top insurers side-by-side to get the best possible deal, and shop return of premium policies online.
Sproutt
18 to 100
$50,000
$10,000,000
Compare 40+ insurers and apply online to get the lowest possible price — no medical exam required.
JRC Life Insurance
25 to 80
$25,000
N/A
Compare policies up to $10 million from 45+ top insurance companies with the click of a button.
Fabric
21 to 60
$100,000
$5,000,000
No-exam term policies up to $1 million online, with the option to upgrade to permanent life insurance later.
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Compare up to 4 providers

How do I compare whole life insurance policies?

You might look at these factors when comparing whole life policies and the brands that underwrite them:

  • Financial strength. Rating agencies like AM Best score an insurer’s financial strength, confirming whether it has the resources to pay out claims.
  • Company type. Public companies are publicly owned by stockholders. Mutual life companies are owned by policyholders and may reinvest any dividends into your cash value.
  • Rate of return. Your insurer guarantees a minimum interest rate on your policy’s cash value. Ask your insurer how it calculates its minimum rate.
  • Customer reputation. Check out insurer reviews on sites like J.D. Power, TrustPilot, NAIC and Finder to find out how they treat customers.

Best whole life insurance companies

How much does a whole life insurance policy cost?

Whole life insurance can cost six to 10 times more than term life policies, according to Finder’s analysis of prices across 14 major life insurers. Young, healthy people might pay $250 to $1,000 a month for whole life, versus $50 to $150 a month for term life. Whole life costs more than term life for three main reasons:

  1. Lifelong coverage. As long as you pay your premiums, you’ll be covered for your entire life.
  2. Guaranteed cash growth. The cash value typically guarantees a fixed rate of return around 1.5%–3.5%, according to Consumer Reports. Other permanent policies fluctuate with the market.
  3. Commission. Life insurance agents make more money from this plan due to its lifelong coverage, so you may pay commission fees.

How does whole life insurance work?

Whole life insurance coverage lasts your entire life, and level premiums mean you’ll pay the same amount each month. Unlike term life, these policies earn cash value on part of your premium that you can use as a loan.

A whole life policy guarantees a death benefit to your beneficiaries when you die. The payout is equal to the policy’s face value — if you buy a $250,000 policy, your beneficiaries will receive $250,000 when you die.

Is whole life insurance taxable?

The premiums and death benefit for whole life insurance aren’t taxable, according to the IRS. Also, the cash growth isn’t typically taxable because the premiums come from your after-tax income.

However, any loans you take out might get taxed if you withdraw too much or the loan and its interest totals more than the cash value. You also may pay taxes if you surrender the policy at a profit from your premiums.

How does the cash value work?

A whole life policy’s cash value earns interest at a fixed rate set by your insurer, typically 1.5% to 3.5%. Once you’ve built enough cash value, you can take out loans against your policy. But any loans reduce your death benefit by the same amount.

But if you don’t use the cash value, your beneficiaries won’t see any additional money aside from the death benefit. Also, the cash value takes a long time to grow and may not equal the premiums you’ve put in.

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Is whole life insurance worth it?

A whole life policy may help if you:

It also makes sense for high-income earners who have maxed out other investment savings. Otherwise, you can find less expensive investments like a 401(k) with a higher return.

If you have basic life insurance needs and affordability is your main concern, you may be better suited to a term life insurance policy.

Pros and cons of whole life insurance

Pros

  • Lifelong protection
  • Access to cash when enough value is built up
  • Premiums stay the same for your life
  • Guaranteed death benefit
  • Cash value will earn a guaranteed interest rate

Cons

  • Premiums are higher than term life insurance
  • Death benefit can’t be changed
  • Coverage doesn’t increase with inflation
  • Other investments may earn more interest

    Alternatives to whole life insurance

    If whole life insurance isn’t right for you, explore these options:

    What’s the difference between whole and term life insurance?

    Similar to whole life insurance, term life coverage provides a lump sum death benefit in the event that the policyholder passes away while the policy is still active.

    Term life insurance is usually the best pick for most people because it’s much cheaper, and whole life insurance isn’t the powerful investment tool that many advisers claim it is.

    Whole life insuranceTerm life insurance
    Cost
    • More expensive due to the investment portion of the policy and guaranteed payout
    • More cost-effective
    Length of coverage
    • Coverage for your entire life if you pay premiums
    • Active for the term selected when you apply
    Features and benefits
    • Cash value lets you borrow funds or use as loan collateral
    • Ladder or combine with disability for wider coverage

    Compare whole life vs term life insurance

    Bottom line

    To get the most competitive rates possible with the policy features you need, reach out to a few choice companies and compare whole life insurance policies.

    Common questions about whole life insurance

    More guides on Finder

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