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The Pros and Cons of Whole Life Insurance

Whole life insurance is a type of permanent life insurance policy which is guaranteed to remain in force for the insured’s entire life. Below, we’ll look at the pros and cons of whole life insurance to help you determine if this type of insurance is right for you.
Pros of whole life insurance

1. Permanent coverage
Whole life’s defining characteristic is perhaps its most influential benefit, meaning that this type of coverage lasts throughout your entire life, guaranteeing that it can one day be used.

2. Borrowing power
Whole life insurance accrues cash value over time on a tax-deferred basis. This money is available for the insured to borrow or withdraw from.[1]

3. Fixed premiums
Whole Life Insurance typically offers fixed premiums[2] meaning that they remain the same for as long as the owner lives, providing a predictable cost of coverage.

Cons of whole life insurance

1. Cost
Because of features like permanent coverage, guaranteed payout[3] and borrowing ability, whole life insurance can sometimes be more expensive than term life insurance.

2. Gains
The investment growth of a whole life insurance policy[4] is typically smaller than that of more traditional investment options. However, while the gains may be small, they are also not subject to stock market losses.

3. Complexity
The variety of options and flexibility can make whole life insurance a little difficult for consumers to understand.

Choosing whole life

So, is whole life insurance a good fit for you? A whole life insurance policy may be a good fit if:

  • You wish to maintain coverage throughout your life, possibly to provide a death benefit to a child or spouse.
  • You’re a higher-income individual and have maxed out your tax-deferred investments.
  • Your family is set to owe a federal or state estate tax on your assets.
  • You wish to leave behind a charitable donation.
  • You own a business along with a partner and wish to set up a buy-sell agreement in the event your partner passes away.

Get a personalized whole life insurance quote by speaking with a licensed agent at 888-428-8870.

[1] Source: value-life-insurance.asp?lgl=myfinance-layout
[2] Source:
[3] Source:
[4] Source: strategy/

Agency services provided by AIG Direct Insurance Services, Inc. ("AIG Direct"), CA license # 0B57619 and AR license # 0100105378, a subsidiary of American General Life Insurance Company ("AGL"), Houston, TX and an affiliate of The United States Life Insurance Company in the City of New York ("US Life"), New York, NY, all members of American International Group ("AIG").

Policies issued by: American General Life Insurance Company (AGL), Policy Forms: ICC15-15532, 15532, 15532-5, 15532-10. Rider Numbers: ICC15-15200, ICC15-15201, 15200, 15200-10, 15200-35, 15201, 15201-9, 15201-10 and 15201-35except in New York where issued by The United States Life Insurance Company in the City of New York (US Life), Policy Form Number: 15532N. Issuing companies AGL and US Life are responsible for financial obligations of insurance products and are members of American International Group, Inc. (AIG).

Products may not be available in all states and product features and rates may vary by state. Guarantees are backed by the claims-paying ability of the issuing insurance company. Each issuing insurance company is responsible for financial obligations of their respective insurance. For all companies mentioned, their financial professionals and other representatives are not authorized to give legal, tax or accounting advice. For advice concerning your individual circumstances, consult a professional attorney, tax advisor or accountant.

AGLCXXXXXX ©2018 AIG. All Rights Reserved.

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