• Jenni Sustrate

What is Whole Life, and Do I Need It?

As an advisor, two main comments I get about whole life insurance is “Do I need it?” and “Isn’t it expensive?”


My explanation is always that it depends on what you are trying to accomplish with insurance. Insurance planning isn’t the same for everyone. We go into what your estate and legacy planning look like in order to determine this answer. 


Whole Life is a product of life insurance and it means that you have this coverage until the day you pass. Other products in the life insurance world are called term insurance and you have those for the amount of time or “term” you have chosen it for. 


Term insurance is great for the short term needs of you and your family. So, if you have a mortgage and other debts you need to cover for 20 years, a term 20 is perfect. If you have smaller children at home for the next 20 years and you need to replace your income for the next 20 years in case something happens, then a term 10 or a term 20 again is a good fit. If you have a business loan for the next 10 years, a term 10 is perfect. 


Where whole life comes into play, is you can only have term insurance for so long, which means at some point in your life you will not be able to have any insurance coverage unless you have permanent life insurance. Whole life insurance is really great for final expenses. When you pass away, your estate still needs to pay for any debts and taxes you owe, it has to pay for your funeral, probate and executor fees. So, if your estate has no money left in it this whole life insurance is perfect for that solution. Your estate may not have any money left in it for a few reasons. Perhaps, you have spent all of your retirement money having an amazing life in retirement. Or, perhaps, you have sold your house and used that money to pay for facility care and medications which can be very expensive.


The other reason you may want whole life insurance is you may have a huge tax bill upon your passing. Now, depending on how you want your estate settled, whole life insurance can fix a lot of your problems with this. This is when it’s important to meet with your accountant, financial advisor and insurance advisor to come up with the best plan on how to deal with settling the assets, the tax consequences and how best to mitigate the least amount of tax that your estate needs to pay. 


Whole Life insurance isn’t always expensive and the benefits can absolutely outweigh the costs. 


If you want a consult about if whole life is right for you, I’d be happy to have that conversation and you can book that with me through my calendar on this website.  I look forward to meeting with you and have a great day!




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