Whole life originated in centuries past as a non-profit approach designed to offer a surviving beneficiary (typically a spouse) a lump sum payment upon the death of an insured party (typically a wage earner). It evolved over long periods of time to include an endowment cash value element. Followed in subsequent decades with the further evolution of the cash value element including an ingenious approach to allocating earnings on paid premiums between a group of policy owners in the form of dividends.

Aside from an early 1980’s effort to mesh stock accounts into a WL framework by actuary Jerry Golden (on behalf of Equitable Life Assurance) , it is exclusively an interest sensitive product. For better when interest rates are high and for worse when they are low.

For an education on whole life (WL) please consult the “How it Works” series of write ups on this product type. Today finds WL products to be under extreme economic and regulatory induced stress. The overwhelming majority of “in force” WL policies are at extreme risk of lapse.

Anyone who owns, or is considering purchasing, a WL product should educate themselves on the design realities of WL and how they interplay with current economic and regulatory factors. It is now, and has been for some time, a “buyer beware” product.

It is equally important to note this is not the result of ill intent as much as it is the consequence of its design. Economic and regulatory realities no longer favor the products ability to deliver meaningful cash value accumulations. It’s no ones fault. It’s just the way it is.

Because WL is widely owned by a great many older American’s a considerable number of write-ups appear on this site attempting to educate current owners and potential new buyers about how WL works. Or, better said, how it no longer works. I’d urge anyone in either category to take the time to educate themselves by reading these extensive and detailed write-ups.