phrase
whole life
In plain English
Permanent life insurance with level premiums, a guaranteed death benefit, and a cash value that grows on a fixed schedule.
Designed to be in force for your whole life, not just a term. Premiums are higher than term but stay flat forever, and the policy builds cash value you can borrow against. Sold heavily in the trust/estate-planning market.
What it covers
A guaranteed death benefit and a guaranteed cash value, both increasing on a contractual schedule. Dividends (if mutual carrier) can purchase additional coverage.
What it does not cover
It is NOT an investment. Cash value growth is conservative — designed for guarantee, not return. Term life plus a separate brokerage account beats whole life for pure return in almost every scenario.
Where it trips people up
Surrender values in the early years are far below premiums paid. Whole life is a long-hold product. Cancel in years 1-5 and you'll lose meaningful money.
The technical version
A form of permanent life insurance with level premiums for life, a guaranteed death benefit, and a fixed schedule of guaranteed cash value accumulation.