Since Whole Life insurance policies can last as long as you live, it will provide peace of mind by knowing the people that depend on you the most will not lose the assets you worked so hard for; your home, investment properties, a business, or recovering taxes that will be paid on retirement plans like 401k.
Whole life provides contractual guarantees like the 4% rate on a portion of your premium payment.
This part of your premium is called the cash value portion of your Whole Life insurance policy, the other portion goes towards the mortality and expense risk charge.
It also has a level premium which means your premium will not increase or decrease.
The death benefit is the part of your premium that is paid to your loved ones generally tax free when you die and can be accessed for terminal illness, chronic illness, and critical illness.
Terminal illness, chronic illness, and critical illness are called living benefits.
The part of your premium that is placed into the cash value will receive the guaranteed 4% rate, plus the non-guaranteed dividend payment that will help grow the value of your cash. This increased value will purchase more life insurance coverage which will increase the death benefit. When the death benefit increases, the more coverage you will receive in living benefits, and your loved ones will receive a larger death benefit.
The cash value portion of this policy is looked at as an alternative to a savings account. Instead of having your money in a savings account that is paying you .25% to .50%, you are guaranteed a 4% rate, plus a non-guaranteed dividend payment that will increase the cash value more than 4%.