Whole Life Insurance

Term life covers you for a set period (10–30 years) at a lower premium; whole life covers you for your entire life and builds cash value. Whole life premiums are higher because part of each payment goes toward the guaranteed cash-value account and lifelong coverage.

You can take a loan against the cash value for any purpose — home repairs, college expenses, emergencies. Borrowing is generally not taxed as income while the policy stays in force. If the policy lapses or is surrendered with a loan outstanding, the gain in the policy becomes taxable — and because the loan is paid off out of your cash value, a tax bill can arrive even if you receive little or no cash. Loans from a modified endowment contract (MEC) work differently: they're taxable up to the gain in the policy when you take them, plus a 10% additional tax before age 59½. An outstanding loan plus interest also reduces the benefit paid at death. We'll tell you whether a policy is a MEC before you buy it, and your tax advisor should review any loan before you take it.

Yes. Final expense whole life policies (typically $5,000–$25,000) are designed specifically to cover funeral, burial, and end-of-life costs. Many require only a health questionnaire — no medical exam — making them accessible for older applicants or those with health conditions.

Coverage is available at a wide range of budget points, especially for final expense policies and smaller face amounts. A licensed Sahlman agent will help you find the right amount at the right premium for your budget. Getting a quote is free.