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6 Pros & Cons of Whole Life Plans

What is a whole life plan?

Whole life plan is an insurance policy that offers you with life-time protection. There are two different types of whole life plan, participating and non-participating. Just like how the names suggest, participating whole life plan is one that will participate in the company’s participating fund and the company will give you a small portion of their profits in the form of bonuses or dividends to your policy. As for non-participating, it will not be entitled to any bonuses.

Pros and cons of whole life plan:

Everything has its pros and cons, including insurance plans.


So, what are some of the pros of a whole life plan?

Fixed premiums

Premiums are usually calculated based on a few factors, one of it is our age. The older our age is, the higher premium we will face. However, for whole life plan, the premium will be calculated based on the age that you bought your policy. This means that you will not get a notice from your insurance agent in every few years that your premium has increased. You will be paying the same premium every month or year.

Building of cash values

Your whole life plan will build cash value and the growth of the cash value is what your insurance agent has written on your plan. These cash values may eventually be used to pay your premiums after a few years. Are there other uses for these cash values? The answer is yes. You can borrow or withdraw these cash values before death. Hence, it can enhance or substitute other sources of your income and ease your financial burden.

Convert to paid-up policy

Most of the whole life plans have this feature where you can stop paying premiums at some point and covert your cash value to a paid-up policy, which means your policy will be fully paid and you do not have to pay for the premiums in the future.

Life-time protection

Whole life plan is a permanent insurance. This means that as long as your premiums are paid, you will be protected, and this protection is a lifetime.


Some cons of a whole life plan will include the higher premiums and it being difficult to understand.

Higher premiums

As whole life plan covers us for whole life, the premiums will tend to be higher as compared to a term insurance, which is an insurance with a specified time period. However, as you renew the term insurance to get a longer protection, the premiums will increase with each renewal. Few years down the road, you will come to realize that the premiums paid for a term insurance will higher than the premiums for whole life plan.


It is difficult to adjust the lump sum payout for whole life plan. Moreover, it is difficult to understand because of its great flexibility in how it can be designed to suit everyone’s needs. However, you should not worry so much on this as you can always ask your insurance agent, who designed the plan according to your needs, to explain the whole life plan to you in great details.

So, is whole life plan worth buying?

To conclude, whole life plan is worth considering because despite its high premiums, you will be able to earn guaranteed cash values which can be used for several uses in the future, and most importantly, you will be protected for life.