Top Whole Life Insurance Coverage: What You Need to Know [2024]
The benefits of top whole life insurance coverage, found at top companies like Northwestern Mutual, are its investment properties, lifelong coverage, and level premiums. Monthly rates for whole life insurance are cheaper the younger a policyholder is, making it wise to buy whole life before age 60.
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Diego Anderson
Licensed Real Estate Agent
Diego Anderson is a Real Estate Agent based in the Bay Area of California. Having received his Real Estate License at the age of 18, he wasted no time learning the ins and outs of the industry. With a focus on residential dual agency, he has a passion for supporting and educating families on their home buying and selling decisions. He is no stranger to new builds and new developments. He also r...
Licensed Real Estate Agent
UPDATED: Mar 7, 2024
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Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Mar 7, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance providers please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Whole life insurance lasts for the duration of your life
- A whole life cash value savings account can be used in retirement
- Some whole life insurance policies will invest premiums in the stock market
The question most often asked by someone in the market for life insurance is whether to buy term life insurance or whole life insurance. The answer to which is best lies with the needs of the person — such as their age, health, and financial goals at the time. The only way to find out what is the best of the different types of life insurance is to look at the pros and cons of a whole life insurance policy, which we cover in our guide.
If you want to start shopping for an affordable whole life insurance policy today, enter your ZIP code in our free quote tool.
What are the top whole life insurance companies by market share?
Many people are attracted to the cash value bonus that whole life has to offer in addition to the death benefit. To get the most from this type of policy you have to start early. It takes time for the policyholder to see earnings after the purchase of the policy because of the initial fees and commissions involved.
When it comes time to purchase your whole life policy, a good place to start is to look at the companies that are leading the country. The best indicator of a leading company is by comparing their market share to their competition.
See the leading life insurance companies by market share below.
Top 10 Life Insurance Companies by Market Share
| Rank | Companies | Direct Written Premium | Market Share |
|---|---|---|---|
| 1 | Northwestern Mutual | $10,517,115,452 | 6.42% |
| 2 | Metropolitan Group | $9,821,445,953 | 6.00% |
| 3 | New York Life | $9,295,848,300 | 5.68% |
| 4 | Prudential | $9,128,805,060 | 5.57% |
| 5 | Lincoln National | $8,769,303,174 | 5.36% |
| 6 | MassMutual | $6,854,713,057 | 4.19% |
| 7 | Aegon/Transamerica | $4,809,856,650 | 2.94% |
| 8 | John Hancock | $4,640,905,017 | 2.83% |
| 9 | State Farm | $4,633,004,963 | 2.83% |
| 10 | Minnesota Mutual | $4,422,100,028 | 2.70% |
Read more:
- Massachusetts Mutual Life Insurance Company Review
- John Hancock Life & Health Insurance Company Review
- John Hancock Life Insurance Company (USA) Review
The larger the market share, the more of the whole customer base the insurer has control over. This shows consistent growth and customers that keep business with the insurer over time.
Sample Monthly Whole Life Insurance Rates
Each insurer underwrites a little differently and so the prices for premiums vary. While most insurers look at different risks in your life, most underwriting procedures will look at your demographics as well as your tobacco use when determining the cost of life insurance. Non-smokers will have a much easier time finding affordable coverage. See below an example of whole life insurance rates for non-smokers offered by Foresters Financial and State Farm.
Read more: How much does a $500000 life insurance policy cost?
Average Monthly Whole Life Insurance Rates for Non-Smokers
| Non-Smoker Age & Gender | Foresters Financial – $250,000 Policy | State Farm – $250,000 Policy | Foresters Financial – $500,000 Policy | State Farm – $500,000 Policy |
|---|---|---|---|---|
| 25-Year-Old Female | $156.80 | $203.14 | $304.24 | $400.19 |
| 25-Year-Old Male | $178.68 | $225.12 | $347.99 | $444.14 |
| 30-Year-Old Female | $188.96 | $234.24 | $368.11 | $462.39 |
| 30-Year-Old Male | $216.52 | $260.14 | $422.80 | $514.19 |
| 35-Year-Old Female | $230.52 | $273.19 | $450.36 | $540.29 |
| 35-Year-Old Male | $267.05 | $311.47 | $522.55 | $616.84 |
| 40-Year-Old Female | $277.99 | $321.24 | $543.99 | $636.39 |
| 40-Year-Old Male | $326.33 | $375.62 | $639.80 | $745.14 |
| 45-Year-Old Female | $349.30 | $381.29 | $685.30 | $756.49 |
| 45-Year-Old Male | $401.58 | $467.84 | $788.99 | $929.59 |
| 50-Year-Old Female | $429.14 | $470.02 | $843.68 | $933.94 |
| 50-Year-Old Male | $499.36 | $578.12 | $982.80 | $1,150.14 |
| 55-Year-Old Female | $549.89 | $598.79 | $1,082.55 | $1,191.49 |
| 55-Year-Old Male | $629.30 | $727.97 | $1,239.61 | $1,449.84 |
| 60-Year-Old Female | $700.83 | $769.94 | $1,381.36 | $1,533.79 |
| 60-Year-Old Male | $802.33 | $988.97 | $1,582.18 | $1,971.84 |
| 65-Year-Old Female | $912.58 | $1,045.09 | $1,800.93 | $2,084.09 |
| 65-Year-Old Male | $1,043.61 | $1,310.87 | $2,060.36 | $2,615.64 |
The rates for smokers is considerably higher.
Average Monthly Whole Life Insurance Rates for Smokers
| Smoker Age & Gender | Foresters Financial – $250,000 Policy | State Farm – $250,000 Policy | Foresters Financial – $500,000 Policy | State Farm – $500,000 Policy |
|---|---|---|---|---|
| 25-Year-Old Female | $228.77 | $257.97 | $446.86 | $509.84 |
| 25-Year-Old Male | $270.33 | $279.92 | $529.11 | $553.74 |
| 30-Year-Old Female | $280.18 | $300.14 | $548.36 | $594.19 |
| 30-Year-Old Male | $325.89 | $325.17 | $639.36 | $644.24 |
| 35-Year-Old Female | $340.11 | $355.39 | $667.36 | $704.69 |
| 35-Year-Old Male | $404.21 | $383.89 | $793.80 | $761.69 |
| 40-Year-Old Female | $411.99 | $421.09 | $821.36 | $836.09 |
| 40-Year-Old Male | $505.27 | $455.44 | $994.61 | $904.79 |
| 45-Year-Old Female | $529.99 | $505.27 | $1,043.18 | $1,004.44 |
| 45-Year-Old Male | $690.33 | $551.79 | $1,360.80 | $1,097.49 |
| 50-Year-Old Female | $650.08 | $621.39 | $1,280.74 | $1,236.69 |
| 50-Year-Old Male | $853.96 | $683.39 | $1,684.99 | $1,360.69 |
| 55-Year-Old Female | $807.58 | $792.14 | $1,592.68 | $1,578.19 |
| 55-Year-Old Male | $1,069.86 | $865.22 | $2,112.43 | $1,724.34 |
| 60-Year-Old Female | $1,018.89 | $964.39 | $2,011.36 | $1,922.69 |
| 60-Year-Old Male | $1,402.58 | $1,158.19 | $2,770.86 | $2,310.29 |
| 65-Year-Old Female | $1,294.52 | $1,204.29 | $2,556.93 | $2,402.49 |
| 65-Year-Old Male | $1,858.46 | $1,490.97 | $3,673.43 | $2,975.84 |
As you can see, younger whole life insurance applicants will see much more affordable rates. You can also save a lot by getting into shape and quitting any bad habits such as smoking.
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How does whole life insurance work?
To put it simply, it’s all in the name. Whole life insurance is permanent life insurance that will last until you die as long as you continue to pay your life insurance premium premium payment. Because the insurance company is taking on more risk with a permanent policy, and because of the accrual of additional wealth, this type of life insurance does come with higher monthly premiums than term life policies. (For more information, read our “Understanding Indexed Whole Life Insurance“).
Another benefit of whole life insurance for seniors is that a portion of your premiums will be placed into a savings-like account that can be used in your retirement. Some insurance companies will even invest this whole life insurance cash value at an increasing rate to provide additional wealth that you can use in your retirement.
Some policies will place the policy into an investment that is dependent on the stock market or other mutual fund style accounts that can produce more wealth at much greater risk.
Read more: Understanding Permanent Life Insurance
How are whole life insurance premiums divided?
Premiums on this policy must be paid monthly or in a single-premium policy, which is paid in one lump sum at the time the policy is issued. Fees and commissions are taken off the top leaving very little, if any, savings at the end of the first year.
After the first year, the cash value rate of return starts to grow annually. Fees cost policyholders around 7 percent monthly. A calculated amount is applied to the death benefit while the remainder is invested. (For more information, read our “Should you pay life insurance premiums monthly or annually?“).
Whole Life Insurance Yields
Most people sit down with a financial planner or an insurance agent to calculate how much insurance they need. They also determine how much they can afford to pay in premiums, in addition to how long they need to pay into the policy to get the desired outcome. Rates of return will depend on the type of whole life policy issued.
What are the different types of whole life insurance?
There are three main types of whole life insurance coverage. Although they are similar products they vary and feature different combinations. The main three include:
- Traditional Whole Life
- Universal Life
- Variable Life
Traditional whole life combines the death benefit with an investment that is made in stocks, bonds, or mutual funds. When a traditional policy is broken down into categories, they appear as these examples:
- Participating – the commonwealth and policyholder shares dividends
- Nonparticipating – commonwealth or insurance company takes the risk on investment return
- Indeterminate – variable yearly premiums
- Economic – the return on investments are used to purchase more term or death benefits
Several other traditional options exist, so if you’re wondering what is universal life insurance, know that it’s known for its flexibility in premiums, face value, and factors that determine the price. Or if you’ve asked what is variable life insurance, know that the value fluctuates.
Although there is a minimum guaranteed death benefit, the fluctuation in cash value is based on stock market conditions. Metlife whole life insurance is an example of universal life insurance.
Read more:
- Top Indeterminate Premium Whole Life Insurance Coverage: What You Need to Know
- Whole vs Universal Life Insurance: Which is better?
- Term vs Whole Life Insurance: Which is better?
- Understanding Life Insurance Face Value
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What is the difference between whole life insurance and term life insurance?
Whole life insurance isn’t your only choice. While whole life insurance offers permanent coverage, a term policy will cover a period of your life in which your loved ones would be particularly vulnerable.
Because a term life insurance policy doesn’t offer cash value, it is usually cheaper. Term policies are often referred to as the most simple life insurance policy for those who don’t want to take the time to learn about the variety of policies.
Read more: Cheap Life Insurance Policies
What’s the best time to purchase a whole life insurance policy?
A whole life policy is intended for your whole life, but it may not be the best option for someone over 50 unless they have an estate. The image below shows how whole life insurance benefits can be used.
Whole life policies are good for estate planning since any amount under the federal exclusion of $3.5 million can be passed on to the next generation tax-free. A married couple may use the second-to-die provision which makes the policy non-taxable until the second spouse dies. (For more information, read our “Top Life Insurance Provider for Married Couples“).
This type of policy may also be okay for a person or couple in their twenties or thirties who plan to have the coverage for more than 20 years, although this is also the demographic that may select term coverage for its low cost and ability to offer protection to children until they are able to take care of themselves.
It is in the later years that the whole life investment begins to grow exponentially. The first 10 years demonstrate slow growth.
Where can you find a whole life insurance policy?
One of the most important aspects of purchasing a whole life insurance policy is to make sure the carrier is stable. A staple in the insurance industry with a well-known track record would be a good option. Most people have relatives and friends who are willing to share their experiences. Otherwise, the internet is a good place to find a whole life insurance calculator.
Check any potential life insurance carrier’s ratings with J.D. Power, A.M. Best, and the Better Business Bureau (BBB) to learn more about the company’s financial stability and customer service. If a company does not have a solid financial strength rating from A.M. Best, take your business elsewhere. A bad review from J.D. Power or the BBB indicates poor customer satisfaction.
Many people also choose to consult with independent insurance agents or financial advisors.
When comparing monthly rates from different life insurers, remember that the price depends on several factors including age, gender, health status, occupation, etc., and that each carrier might weigh these factors a little differently.
This is why it is important to shop around and compare quotes from multiple life insurance providers before signing up for a policy.
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What are the pros and cons of whole life insurance?
The best feature of the whole life policy is the investment and savings option. You can also borrow from a whole life policy. Gifting is another good feature that allows the insured to gift the face value to a loved one or charitable organization tax-free. If the insured lives to age 100, they are no longer obligated to premiums, yet the insurance coverage continues.
Some cons that whole life insurance policyholders face are the decrease in the death benefit or face value in slow economic times, or if a loan is made against it. Although there is an investment option, there are other investment options that will yield a greater return.
The policyholder must decide if they want to tie up their money in this way, or in a way that will yield more money. A person over 65 will also pay higher premiums, especially if they have health issues.
Read more: What is Medicare?
Case Studies: Top Whole Life Insurance Coverage
Case Study 1: John’s Secure Future
John, a 35-year-old professional, selected Company A’s whole life insurance coverage to secure his family’s financial future. He appreciated its competitive premiums, guaranteed death benefit, and potential cash value growth. With this policy, John found peace of mind, knowing his loved ones would be financially protected and able to sustain their lifestyle without his income. (For more information, read our “Top Family Life Insurance: What You Need to Know“).
Case Study 2: Sarah’s Estate Planning
Sarah, a wealthy businesswoman in her late 50s, selected Company B’s whole life insurance for estate planning. The policy provided a substantial death benefit, covered taxes and expenses, and allowed cash value accumulation for financial flexibility. Sarah saw it as a means to safeguard her wealth for future generations and her personal financial needs.
Read more: Best Life Insurance Policies for Wealthy People
Case Study 3: Mark’s Retirement Strategy
Mark, a 45-year-old entrepreneur, included Company C’s whole life insurance in his retirement plan to secure a reliable income source. Mark’s whole life insurance policy allowed tax-deferred savings, cash value accumulation, and access to funds through dividends, ensuring a comfortable retirement and financial flexibility. (For more information, read our “How Life Insurance Dividends Work“).
Case Study 4: Michael’s Business Continuation
Michael, an early 40s business owner, secured Company E’s whole life insurance to protect his company and family’s financial well-being. The buy-sell agreement rider provided a smooth ownership transition and funds for partners to acquire Michael’s shares if he passed away, ensuring business continuity and protecting employees’ livelihoods.
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Whole Life Insurance: What’s the bottom line?
Purchasing life insurance is a wise decision that can protect and propel your family when you die. A whole life insurance policy takes this protection and expands it across your entire life. With this protection also comes the option for cash value that will add up to a large amount and help with any expenses in retirement. All of this comes together to make a policy that offers simple life-long coverage that will protect your family for many years to come.
Ready to find whole life insurance quotes online? Use our FREE quote tool to find out what you could pay each month.
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Frequently Asked Questions: Whole Life Insurance
Below are some whole life insurance FAQs to help you fully understand whole life.
#1 – Is a whole life policy a good investment?
If you purchase a life insurance policy earlier in your life and pay into the cash value investment account, you will have the ability to use this cash value in retirement. Some companies will even invest your benefit at a guaranteed increasing rate so you get the most out of your investment.
#2 – Which is better, whole life or term life insurance?
The kind of life insurance you need depends heavily on your specific life and the relationships that lie therein. If you have a growing family or business, you may want term life to cover this time when your finances would be the most vulnerable. Whole life is a good idea for those who want help in retirement and the ability to leave an inheritance no matter when they die.
#3 – What is the best whole life insurance?
Much like whether you need whole or term, which type of whole life policy you need will depend on your life. Do you want the risk of stock investment, or would you prefer to have control over your premiums and death benefit? Your preferences will help guide you to the policy that will most benefit your family and loved ones when you pass.
Frequently Asked Questions
What is whole life insurance?
Whole life insurance is a type of permanent life insurance that provides coverage for your entire lifetime, as long as the premiums are paid. It combines a death benefit with a cash value component that grows over time.
How does whole life insurance differ from term life insurance?
Whole life insurance provides coverage for life, while term life insurance offers coverage for a specific term, such as 10, 20, or 30 years. Additionally, whole life insurance has a cash value component, which term life insurance does not have.
What are the benefits of whole life insurance?
Some key benefits of whole life insurance include:
- Lifelong coverage: Whole life insurance guarantees coverage for your entire life, as long as premiums are paid.
- Cash value growth: The cash value component of a whole life policy accumulates over time and can be used for various purposes, such as borrowing against it or withdrawing the cash.
- Potential dividends: Some whole life policies may pay dividends, which can be used to increase the policy’s cash value or reduce premiums.
How is the premium determined for whole life insurance?
Premiums for whole life insurance are typically higher than those for term life insurance because they provide lifelong coverage and include a cash value component. The premium amount is based on various factors, including the insured person’s age, health, and the death benefit amount.
Can I borrow money from my whole life insurance policy?
Yes, one of the advantages of whole life insurance is that you can borrow against the accumulated cash value of the policy. However, borrowing against the policy reduces the death benefit and may incur interest charges.
Are there any tax advantages to whole life insurance?
The cash value growth in a whole life insurance policy is generally tax-deferred, meaning you won’t owe taxes on the growth until you withdraw the money. Additionally, the death benefit is usually received income tax-free by the beneficiaries.
Can I convert a term life insurance policy to a whole life insurance policy?
Some term life insurance policies offer a conversion option, allowing you to convert to a whole life policy without undergoing a medical examination. However, this option is typically available only for a limited period, usually during the initial term of the policy.
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Diego Anderson
Licensed Real Estate Agent
Diego Anderson is a Real Estate Agent based in the Bay Area of California. Having received his Real Estate License at the age of 18, he wasted no time learning the ins and outs of the industry. With a focus on residential dual agency, he has a passion for supporting and educating families on their home buying and selling decisions. He is no stranger to new builds and new developments. He also r...
Licensed Real Estate Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.