Instead of asking if whole life insurance is worth purchasing, consider asking yourself, ‘What am I trying to accomplish, and is whole life the right tool for that job?’

When matched to the right situation, whole life insurance can provide powerful benefits like guaranteed growth, tax-free access to cash, and lifetime protection. When mismatched, it can be expensive and unnecessary. What matters is understanding the difference.

At Intelliplan Financial, we’ve helped countless clients in the Columbus area and beyond, evaluate whether whole life insurance makes sense for their unique situation—and the answer is rarely black and white.

Let’s cut through the noise with an unbiased look at how whole life insurance works to help you determine if it makes sense for you.

What Whole Life Insurance Is & How It Works

Whole life insurance is a type of permanent life insurance that provides coverage for your entire life, as long as you pay the premiums. Unlike term life insurance, which covers you for a specific period (such as 20 or 30 years), whole life never expires.

Whole life insurance policies have two main components:

The Death Benefit: The amount your beneficiaries receive when you pass away, income-tax-free.

The Cash Value: This is where whole life differs significantly from term insurance. A portion of your premium payments goes into a cash value account that typically grows over time on a tax-advantaged* basis.

How Cash Value Works

When you pay your premium, part of it goes toward the death benefit, part covers the insurance company’s costs, and the rest goes into your cash value account. This cash value grows based on contractually guaranteed rates, plus potential dividends from the insurance company (if it’s a participating policy).

The key advantage? You can access this cash value during your lifetime through policy loans or withdrawals without tax consequences up to the amount you’ve paid in premiums. This is different from a 401(k) or IRA where you face taxes and potential penalties for early withdrawals.

However —and this is important— it usually takes several years before your cash value becomes substantial. In the early years, much of your premium goes toward covering insurance costs and commissions.

Which Is Better: Term Life Insurance or Whole Life?

The answer depends on understanding what you’re trading. Here’s what whole life gives you versus what you give up compared to term insurance:

A Real Example

Our founder, Joe Overfield, experienced the power of properly structured whole life insurance firsthand. When he lost his job during the 2007 market crash, his Bank On Yourself® policy kept his family financially stable during months of unemployment—providing accessible funds without penalties, credit checks, or loan applications. That experience inspired him to help others benefit from well-designed whole life insurance.

So, ask yourself, are the benefits worth the trade-offs for your situation?

How Much Does a Whole Life Insurance Policy Cost?

Now that you understand the trade-offs, let’s talk numbers. What does “significantly higher premiums” really mean?

In general, whole life insurance can cost 5-15 times more than term insurance. That’s because it provides lifelong coverage and includes a cash value component, whereas term insurance is temporary and purely protective.

However, whole life insurance costs can vary dramatically based on your age, health, death benefit amount, policy structure, and insurance company. While designing your policy, we take your entire financial position into account to help us determine the costs of your personalized policy to meet your needs.

So instead of only considering whether you can technically afford the premiums, consider if those premium dollars provide more value in a whole life policy than they would in other parts of your financial plan. That’s what we help clients evaluate.

Ready to find out if whole life insurance fits your financial plan? Schedule a free 20-minute consultation to get personalized guidance from our fiduciary advisors.

Our Approach: Whole Life Insurance Within a Holistic Plan

At Intelliplan Financial, we don’t look at whole life insurance in isolation. We consider how it fits within your complete financial picture alongside retirement accounts, investments, tax planning, and estate goals.

Using our holistic planning process, we help you understand where whole life might serve your needs across different time horizons – whether that’s addressing immediate needs, near-term goals, or long-term objectives. This approach, rooted in The Bucket Plan® philosophy, helps ensure every financial decision works together toward your goals.

We’re one of fewer than 200 firms nationwide trained as Bank On Yourself® Professionals, so we understand how dividend-paying whole life insurance can be structured for maximum benefit. But we also know it’s not suitable for everyone – and as fiduciary advisors, we’ll tell you honestly whether we think it aligns with your needs.

What matters most is that you have a clear understanding of what you’re buying (or keeping) and why it aligns with your overall financial strategy.

Frequently Asked Questions About Whole Life Insurance

Is whole life insurance a good investment?

It depends on your needs. When properly structured, whole life can be a beneficial addition to your portfolio as it provides guaranteed growth, tax advantages, and accessible cash value.  If predictability and tax advantages over maximum returns are important to you, it can be valuable. If you’re purely seeking the highest possible returns, market-based investments often outperform whole life over the long term. Think of it as a financial tool rather than an investment competing with stocks.

Who should buy whole life insurance?

Whole life can be a good fit for many people – like high-income professionals who’ve maxed out 401(k)s and IRAs, business owners with estate planning needs, those who value guaranteed growth and want to protect a portion of their money, or those who need tax-free retirement income. It’s less appropriate if you’re simply looking for affordable coverage or maximum investment returns. Review the comparison table above to evaluate if the benefits outweigh the trade-offs for your situation.

Why do some people say whole life insurance is bad?

Critics point to high costs, low returns compared to investing premiums elsewhere, and complex policies that are hard to understand. Many of these criticisms are valid—when the policy is poorly structured or sold to someone for whom it’s not appropriate. However, when properly designed and matched to the right circumstances, whole life can provide valuable benefits that other financial tools don’t offer. You just need to make sure it fits your needs.

Need Help Deciding? We’re Here to Help

Whether you’re considering a whole life policy, wondering if you should keep one you already own, or just want an unbiased second opinion, we’d be happy to review your coverage and options during a consultation.

As fiduciary advisors, we take the time to understand your complete financial picture before designing a holistic financial plan or recommending any product – including whole life insurance. We’re legally and ethically bound to put your interests first.

Schedule a free 20-minute consultation to discuss whether whole life insurance is right for your holistic financial plan. You can also explore more financial planning insights on our blog.

Disclosure: Financial Planning and Advisory Services are offered through Prosperity Capital Advisors (“PCA”), an SEC-registered investment adviser. Registration as an investment adviser does not imply a certain level of skill or training. Intelliplan Financial and PCA are separate, non-affiliated entities. PCA does not provide tax or legal advice. Insurance services offered through Intelliplan Financial are not affiliated with PCA.

*Certain rules may apply for distributions to obtain tax-free status