Key Takeaways
- Whole life premiums are 5-15x higher than term—but coverage never expires
- Cash value typically reaches 70-80% of premiums paid after 20 years
- Whole life makes sense for 15-20% of clients—those with permanent needs or estate planning goals
Whole Life: Permanent Protection + Savings
Client Question: "Is whole life worth the extra cost?"
Whole life costs 5-15x more than term for the same death benefit—but it provides guarantees term can't match: coverage that never expires, cash value that grows tax-deferred, and premiums that never increase.
When Whole Life Makes Sense
| Situation | Why Whole Life Works |
|---|---|
| Estate planning | Guaranteed death benefit for wealth transfer |
| Permanent dependents | Child with special needs, lifelong support |
| Forced savings | Cash value grows regardless of discipline |
| Business succession | Predictable funding for buy-sell agreements |
| High net worth | Tax-advantaged wealth transfer |
Whole Life Features
- Guaranteed death benefit — Never decreases
- Fixed premiums — Never increase
- Cash value growth — Guaranteed minimum rate
- Dividends — Possible (with participating policies)
- Loan access — Borrow against cash value
Honest Limitations
- Higher cost — Significantly more than term
- Slow cash value growth — Takes years to build meaningful value
- Opportunity cost — Could invest the difference elsewhere
- Complexity — More moving parts than term
When Whole Life Fits
A high-income client with estate planning needs
Setup
A successful business owner, age 55, has more than enough for retirement but wants to leave a legacy to grandchildren and minimize estate taxes.
Client says:
“I've done well and I don't need more retirement savings—my 401k and investments are solid. But I want to make sure I leave something significant to my grandkids. And my accountant says I need to think about estate taxes. Someone mentioned life insurance for this?”
Practice Objectives
- 1Explain how life insurance can create instant legacy
- 2Discuss estate tax implications (at their asset level)
- 3Introduce whole life as guaranteed, permanent coverage
- 4Discuss how death benefit passes outside probate
- 5Be clear about costs vs. benefits at their age
The Whole Life Skeptic
Someone who's heard whole life is a "bad investment"
Setup
A prospect has read online that whole life is a rip-off and agents push it for commissions. They want term but you think whole life might actually fit their situation.
Client says:
“I want to be clear upfront—I'm not interested in whole life. I've done my research. Everyone says whole life is a bad deal and agents push it because they make more money. I just want simple term insurance.”
Practice Objectives
- 1Acknowledge their research and skepticism
- 2Don't be defensive about whole life or commissions
- 3Ask about their specific situation and needs
- 4Explain when term makes sense vs. when it doesn't
- 5Only suggest whole life if it genuinely fits—maybe it doesn't
The Special Needs Child
Parents of a child with lifelong care needs
Setup
Parents of a 10-year-old with Down syndrome are planning for his lifetime care. They need to ensure he's provided for even after they're gone.
Client says:
“Our son Michael has Down syndrome. He's going to need support his whole life. We've set up a special needs trust, but we need to make sure there's money in it when we're gone. He could live to 60 or 70—we need coverage that doesn't expire.”
Practice Objectives
- 1Show understanding of their unique situation
- 2Explain why permanent coverage makes sense here
- 3Discuss whole life as guaranteed lifetime coverage
- 4Connect to the special needs trust they've established
- 5Handle this sensitive conversation with care
A 30-year-old with average income asks about whole life "as an investment." The best response is: