Whole Life Insurance Calculator
Calculate premiums and cash value for permanent life insurance
Calculate Whole Life Premium
Personal Information
Buy early for lower premiums
Policy Details
Typical range: $100,000 - $1,000,000
Participating policies cost more but earn dividends
Cash Value Projection Settings
Typical: 2-3% guaranteed
Historical average: 5-6% (not guaranteed, for illustration only)
Premium & Cash Value Summary
Whole Life vs Term Life + Investment
Whole Life Insurance
Term Life + Invest Difference
* This comparison assumes investing the premium difference in a taxable account earning 7% annually. Whole life offers tax-deferred growth and guaranteed death benefit. Consider your financial goals and tax situation.
Cash Value Projection (First 10 Years & Key Milestones)
| Year | Age | Premium | Guaranteed CV | Dividend CV | Total CV | Death Benefit |
|---|---|---|---|---|---|---|
| 1 | 36 | $33,810 | $11,834 | $0 | $11,834 | $250,000 |
| 2 | 37 | $33,810 | $23,667 | $130 | $23,797 | $250,065 |
| 3 | 38 | $33,810 | $34,740 | $418 | $35,158 | $250,209 |
| 4 | 39 | $33,810 | $46,089 | $929 | $47,019 | $250,465 |
| 5 | 40 | $33,810 | $57,723 | $1,736 | $59,459 | $250,868 |
| 6 | 41 | $33,810 | $69,816 | $4,097 | $73,913 | $252,049 |
| 7 | 42 | $33,810 | $82,211 | $7,420 | $89,631 | $253,710 |
| 8 | 43 | $33,810 | $94,917 | $11,923 | $106,840 | $255,961 |
| 9 | 44 | $33,810 | $107,940 | $17,856 | $125,796 | $258,928 |
| 10 | 45 | $33,810 | $121,289 | $25,509 | $146,798 | $262,754 |
| 30 | 65 | $33,810 | $470,800 | $2,139,359 | $2,610,159 | $1,319,679 |
* Highlighted row shows age 65. Cash values are illustrated and not guaranteed (except guaranteed CV column). Actual results will vary based on insurer performance.
Key Insights
How Cash Value Accumulates
Years 1-3: Slow Start
Early years have minimal cash value due to commission costs and insurance charges. This is normal for whole life policies.
Years 4-10: Building Phase
Cash value begins to accumulate more rapidly. Guaranteed growth plus potential dividends (for participating policies) compound tax-deferred.
Years 10+: Acceleration
Cash value growth accelerates significantly. You can borrow against it tax-free or use it for retirement income. Death benefit remains guaranteed for life.
Premium Factors
Whole Life Benefits
Guaranteed death benefit for life
Tax-deferred cash value growth
Level premiums never increase
Tax-free loans against cash value
Potential dividends (participating policies)
No market risk - guaranteed returns
Important Considerations
Much higher premiums than term insurance
Cash value builds slowly in early years
Early surrender may result in losses
Long-term commitment (20-30+ years)
Best for estate planning and lifetime coverage needs
Understanding Whole Life Insurance
What is Whole Life Insurance?
Whole life is permanent life insurance that provides guaranteed coverage for your entire life, regardless of age. Unlike term insurance, it never expires and accumulates cash value that grows tax-deferred. Premiums remain level throughout your lifetime.
Components of Your Premium
- •Mortality Charge: Cost of life insurance protection
- •Cash Value: Savings component that grows over time
- •Expenses: Administrative costs and commissions
Policy Types
Pays dividends based on insurer's performance. Dividends can increase cash value, reduce premiums, or be taken as cash. Not guaranteed but historically consistent.
Lower premiums but no dividends. Cash value grows at guaranteed rate only. More predictable but less upside potential.
Payment Options
Whole Life
- • Pay until death
- • Lowest annual premium
- • Continuous payments
- • Most common option
Limited Pay (20-Pay)
- • Pay for 20 years
- • Higher annual premium
- • Paid up after 20 years
- • Popular choice
Paid-Up at 65
- • Pay until age 65
- • Moderate premium
- • No premiums in retirement
- • Retirement-focused
Using Cash Value
Policy Loans
- • Borrow up to 90% of cash value
- • No credit check or approval needed
- • Interest charged (typically 5-8%)
- • Tax-free if policy stays in force
- • Reduces death benefit if not repaid
Withdrawals
- • Withdraw up to basis tax-free
- • Permanently reduces cash value
- • May reduce death benefit
- • Cannot be repaid
- • Use for emergencies or retirement
Is Whole Life Right for You?
Good Fit If You:
- ✓ Need lifetime coverage (estate planning)
- ✓ Already maxed out retirement accounts
- ✓ Want guaranteed, tax-deferred growth
- ✓ Have high income and low tolerance for risk
- ✓ Need forced savings discipline
- ✓ Want to leave a guaranteed inheritance
Better Alternatives If You:
- ✗ Only need coverage for specific period
- ✗ Haven't maxed 401(k) or IRA
- ✗ Want higher investment returns
- ✗ Have limited budget for insurance
- ✗ Prefer flexibility in investments
- ✗ Are young with temporary needs