How to Buy Whole Life Insurance

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Whole life insurance is a type of life insurance coverage that is designed to last your whole life, unlike term insurance which is scheduled to expire after a certain number of years. The top benefits of whole life insurance include lifetime coverage, cash value, and premiums that won’t increase as you get older. One drawback is that these policies charge a much higher premium (initially) compared to shorter-term options. 

It’s crucial to compare whole life quotes and understand the buying experience to get the best policy for your needs, especially since the insurer you work with can make a big difference in how much you pay. Here’s a complete look at the process for how to buy whole life insurance as well as quotes from some of the most popular carriers.

How to Buy Whole Life Insurance

1. Determine How Much Life Insurance You Need

Before researching quotes, consider how much life insurance you need. One quick rule of thumb is to buy at least six to 10 years of your salary. Another approach is to multiply how many years you have left until retirement by your salary. For example, someone who expects to work 20 more years earning $40,000 would need $800,000 in life insurance according to this rule.

There are other calculations that look more closely at your specific financial situation. For example, the DIME approach says your life insurance should be enough to pay off all your debts, replace your income until your children turn 18, and provide for their college education. By looking at the specifics of your financial plan, you can finetune how much you buy so you don’t have too little or too much.

If you can’t currently afford the premium for the amount of life insurance you need, consider purchasing a lesser amount of coverage plus a guaranteed insurability rider. This allows you to increase your coverage later but still qualify for the same health and rate class.  

2. Get Quotes

Collecting quotes is one of the most important parts of the life insurance buying process and should consist of the following steps.

Select the Companies

There are several hundred life insurance companies to choose from in the United States. You may already have some options in mind based on your existing insurance policies, relationships with local agents, and/or referrals from friends. Other factors to consider as you compare companies are:

  • AM Best financial strength rating: indicates a company’s ability to pay its insurance claims.
  • J.D. Power customer satisfaction ranking: J.D. Power annually surveys consumers on their experience with major life insurers  
  • NAIC consumer complaint index: Every year, the National Association of Insurance Commissioners (NAIC) calculates a complaint index for every insurer that indicates whether it received fewer complaints than expected, more than expected, or an expected amount.

Prepare Information and Get Quotes

For whole life insurance policies, you’ll generally need to contact an agent directly to get a quote. (This is unlike term life insurance quotes, which are readily available online.) Each company has different requirements to put together a quote. Expect to submit:

  • Your age.
  • Your zip code.
  • Your height and weight.
  • Whether you’ve used tobacco.
  • Some information on your medical history, like whether you have high blood pressure or high cholesterol. 
  • Some information on your family history, like whether there is a history of cancer.
  • The amount of coverage you want for the death benefit.

Callout Important: The quote is just an estimate and not a guarantee of what you’ll pay after formally applying and qualifying for a policy.

Request Illustrations

Life insurance illustrations provide much more information about the policy than a quote, including features, limitations, riders, and performance over time. Whole life insurance policies accumulate a cash value, which supports the death benefit and helps keep premiums level over time. But the cash value is also something you can borrow or withdraw from. 

An illustration will estimate your cash value and death benefit at different policy years using both guaranteed and non-guaranteed future returns. It also indicates surrender charges and how long they apply (should you cancel or withdraw from the policy during the surrender period). 

Callout Important: Most whole life insurance policies have a surrender period, which can last up to twenty years, during which time you’ll face surrender charges for canceling or withdrawing from the policy.

3. Compare Quotes/Illustrations

When comparing whole life insurance policies via quotes and illustrations, make sure to consider more than how much they cost. While cost is an important factor, other factors to compare are:

  • Cash value accumulation: Whether the policy has cash value and if so, how quickly it grows.
  • Dividends: Whether a company pays part of its profits to policyholders as a dividend, which increases how quickly the cash value grows.
  • Surrender period: Whether there’s a surrender period. If so, the policy would charge a penalty if you cancel to get your money back within the first few years of your purchase.
  • Living benefits: Whether there are other useful features, like accelerated death benefits which pay the death benefit while you’re alive if you experience a terminal, chronic, or critical illness (depending on the type of living benefits included or purchased).

 4. Add Riders (optional)

Riders are a type of optional benefit you could add to your whole life insurance policy, for an additional charge. Some common ones include:

  • Disability waiver of premium: If you become disabled, the policy stops charging you the premium.
  • Accidental death:  If you pass away in an accident, the policy pays your heirs a larger payout, usually twice as much as the listed death benefit.
  • Child term rider: This rider gives your minor children life insurance coverage as part of your policy.
  • Guaranteed insurability: Policies with this rider allow you to increase the death benefit in later years while still qualifying for the same rate and health class you do when you apply.

5. Complete the Application 

To complete the whole life insurance buying process, you typically need to go through medical underwriting. The insurer often pulls your medical records, requests a thorough health and family history, and may ask you to submit blood and urine for testing, and/or have you meet with a nurse for a thorough physical. Someone who is healthier is much more likely to qualify for life insurance at a lower premium.

Insurers have begun using accelerated underwriting processes (no-medical-exam life insurance) allowing those in excellent health to skip the medical exam. Your health information is collected from other sources so you don’t need to undergo an exam.

Some life insurance companies offer final expense or burial insurance policies that don’t require a medical exam or medical underwriting. These policies are designed for applicants in poor health, have a small death benefit, and aren't generally’ recommended if you’re in average health or better. 

6. Purchase 

Once underwriting is complete, the insurer will let you know whether they’re willing to extend coverage and at what rate. 

Most companies allow you to pay your premium when you first submit the application, providing conditional coverage while the insurer reviews your records. If you die during this period, your heirs receive the death benefit. That way you don’t have to go uncovered while waiting on the application process.

7. Free-Look Period

After you sign up,  insurance companies are required to give you a free-look period. This is a period of up to 30 days, depending on where you live. During this time, you can thoroughly review your life insurance contract. If you change your mind at any point during the free look period, you can request a full refund of your premium, no questions asked. 

Whole Life Insurance Cost

What you’ll pay for whole life insurance depends on many factors, including your location, age, health, gender, occupation, policy features, and the company you choose. 

But to give you an idea, here is a sampling of whole life insurance quotes across five major life insurance companies. Quotes were collected for 30-, 40-, and 50-year-old males in excellent health living in the 19808 zip code (Wilmington, DE). As you can see, there is considerable variation, which is why it’s important to get whole life insurance quotes from multiple providers.

Quote for a 30-Year-Old

30-year-old  Dividends  $250,000 death benefit  $500,000 death benefit  $1,000,000 death benefit 
Protective Life No $140.37 $280.72 $465.93
Corebridge Financial  No  $146.62  $283.90  $514.86 
State Farm  Yes  $281.44  $556.79  $1107.49 
Nationwide  No  $146.32  $287.44  $569.63 
MassMutual  Yes  $228.33  $452.50  $881.67 

Quote for a 40-Year-Old

40-year-old  Dividends  $250,000 death benefit  $500,000 death benefit  $1,000,000 death benefit 
Protective Life No $180.81 $361.58 $654.96
Corebridge Financial  No  $207.51  $402.18  $775.42 
State Farm  Yes  $417.59  $829.09  $1,652.09 
Nationwide  No  $223.78  $442.31  $879.38 
MassMutual Yes  $340.00  $675.83  $1,314.17 

Quote for a 50-Year-Old

50-year-old  Dividends  $250,000 death benefit  $500,000 death benefit  $1,000,000 death benefit 
Protective Life No $280.62 $561.21 $1,032.72 
Corebridge Financial  No  $290.59  $580.40  $1,069.27 
State Farm  Yes  $707.32  $1,408.54  $2,810.99 
Nationwide No  $359.41  $713.56  $1,421.88 
MassMutual Yes  $519.83  $1,035.42  $2,027.50 

Whole life companies that pay dividends (such as MassMutual and State Farm) tend to charge higher premiums than policies that don’t. Dividend-paying policies, though more expensive, can be a valuable purchase if you wish to more rapidly increase the cash value and death benefit.

Best Whole Life Insurance Companies

  • Nationwide: Nationwide has been in business since 1925. They have an A+ rating from AM Best. Their policies do not pay dividends.
  • MassMutual: MassMutual has been in business since 1851. They have an A++ rating from AM best. Their whole life policies do pay dividends and have paid dividends every year since 1869.
  • Mutual of Omaha: Mutual of Omaha has been in business since 1909. They have an A+ rating from AM best. Their whole life policies do not pay dividends.
  • Guardian: Guardian has been in business since 1860. They have an A++ rating from AM Best. Their whole life policies do earn dividends.
  • Penn Mutual: Penn Mutual has been in business since 1847. They have an A+ rating from AM Best. Their whole life policies do earn dividends and have received dividend payments for nearly 175 years straight.
  • State Farm: State Farm has been in business since 1922. They have an A++ rating from AM Best. Their whole life policies can earn dividends.
  • New York Life: New York Life has been in business since 1845. They have an A++ rating from AM Best. Their whole life policies do earn dividends and have received dividends for 169 years in a row.
  • Northwestern Mutual: Northwestern Mutual has been in business since 1857. They have an A++ rating from AM Best. Their whole life policies do earn dividends and have received a dividend annually for more than 150 years straight.

Alternatives to Whole Life Insurance

Universal life (UL) insurance is another type of permanent life insurance policy and a popular alternative to whole life insurance because it tends to be more affordable. The potential drawback of universal life insurance is that it has fewer guarantees. In other words, you may need to increase premium payments in later years if the cash value doesn’t perform as expected. 

UL policies allow you to adjust the premium payment up and down each year to fit your budget, but do require closer management as you age, since insurance costs increase. You need to pay enough in the early years, so you have extra cash value to cover the rising costs as you get older.

Another option is variable life insurance. These policies let you invest the cash value in market assets like mutual funds. Your growth can be higher if investments do well. But you can lose the policy and your cash value if investments perform poorly. Variable life could make sense if you already have sufficient life insurance coverage and are willing to take on more risk with an additional policy in exchange for potentially higher cash value growth.

For a lower cost, non-permanent option, consider term life insurance. These policies have a set expiration date and are not guaranteed to last your entire life. They last for a fixed term, typically up to 30 years. However, convertible term life policies can be exchanged for permanent coverage, which can be a good strategy if you’re unable to afford whole life insurance now, but wish to purchase it (or convert into it) later. Term policies cost significantly less than whole life and other types of permanent life insurance.


What Is Whole Life Insurance?

Whole life insurance is a type of life insurance that doesn’t expire, so long as you keep paying the premiums. These policies charge the same premium for life and include a cash value guaranteed by the insurance company and accessible while you’re alive. Some whole life policies also pay dividends. 

Is Whole Life Insurance Worth It?

Whole life insurance can be worth it if you want long-term insurance protection combined with a way to save money for the future in a guaranteed account. These policies do cost more than term life insurance and the cash value return is less than what you could potentially receive investing in the stock market. However, for those who want guaranteed long-term insurance protection combined with a very safe way to build savings, whole life insurance can be a good value.

What Is the Difference Between Term and Whole Life Insurance?

Term life insurance is temporary life insurance with a set expiration date whereas whole life insurance does not expire and can last your entire life. Whole life insurance can also build cash value whereas term life insurance does not. Because of this, term life insurance is much less expensive than whole life insurance for the same size death benefit.