How it works
The carrier prices the policy to last your whole life, so the premium is set high enough at the start to carry the cost of insuring you at eighty. Part of each payment covers the insurance; the rest accumulates inside the policy as cash value, which grows at the minimum rate written into your contract. Some carriers also pay dividends on top of that; those are never guaranteed, whatever an illustration shows.
You can borrow against that cash value or surrender the policy for it. Both reduce what your beneficiaries receive, and a loan left unpaid can eventually collapse the policy — which is the part of the sales conversation that tends to get compressed.
When the premium is the point
A modest permanent policy so a funeral and the loose ends after it aren't paid out of someone's savings. This is the most common honest use.
A child who will need support after you're gone. The obligation has no end date, so neither should the coverage.
Liquidity at death for taxes, or funding a buy-sell agreement between partners. Worth doing alongside an attorney or CPA, not instead of one.
Against the other two
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| Term | Whole | IUL | |
|---|---|---|---|
| Lasts | 10–30 years | Lifetime | Lifetime, if funded |
| Premium | Level, lowest | Level, highest | Adjustable |
| Cash value | None | Guaranteed, slow | Index-linked, capped |
| Needs watching | At renewal | Rarely | Yearly |
A summary, not a quote. Actual features, costs, and guarantees are set by the carrier and the policy you're issued.