Whole Life Insurance is a type of insurance that covers the insured person up until their death and also includes an investment component. When a whole life insurance policy is established the insured has cover for death by any cause even if this occurs well into the future, as long as premiums have been paid, there is no expiry date due to age attached to this type of policy.

Due to the investment component of this type of policy, insurance advisers have referred to Whole Life Insurance policies as a retirement plan as it can be cashed in at any age and the policy owner can use the proceeds for any purpose.

One of the main advantages of whole life insurance is that cover is guaranteed regardless of the age of the insured, if the policy commenced when the insured was aged 25 and the insured is now 70 the policy will continue as long as premium payments are up to date.

Premium amounts generally remain constant over time as long as the insured continues to make payments. A portion of the premium payment forms part of the investment component of the policy, the insured has the option to pay off the entire insurance component early if they wish, full coverage remains in place for the future without the need for further premium payments. Most whole life insurance policies can be cashed in if the insured decides they longer require this cover and cancel their policy.

The main disadvantages of whole life insurance policies is that the rate of return on the investment component may not be as competitive as other investment options, premiums are generally not very flexible and are priced higher than shorter term insurance, but will generally average out over longer periods of time.
In summary Whole Life insurance provides premiums that remain constant with fixed premiums, guaranteed death benefits and investment returns.