One of the big differences between a Term life insurance policy and a Whole Life insurance policy is the accumulation of cash inside the policy.  With Whole Life insurance, as long as you make your premiums as required, the cash values are guaranteed to never lose their value while inside the policy.  Once they are printed on your statement, regardless of what happens with the economy, they will never lose their value.

With any Whole Life policy, the cash value will grow every year, even if the insurance company should not declare any dividends (while dividends are not guaranteed, the companies we work with have not missed a dividend yet, and some of them have been in business for over 150 years).  If your policy is set up properly, you can accelerate how fast these cash values can grow.  A new “floor” (minimum amount of accessible cash values) is set annually on the policy anniversary date, and it can never go down (as long as the premiums are being paid).  

Another key component of the Whole Life product is that by age 100, the cash value is guaranteed to equal the total death benefit.  This total death benefit includes the original death benefit amount (when the policy was started) along with all increases that were purchased by policy dividends or Paid-Up Additions (see “Paid-Up Additions”).