Whole life insurance offers what the industry calls a "permanent protection" with a cash value account that builds up over time. Whole life provides a level death benefit and level premiums throughout your life, as long as you continue to pay the premiums. 

For example, a 40-year old female may pay $4,200 a year for a $500,000 whole life policy. The premium will remain $4,200 a year for the rest of her life. At the time of her death, the policy will pay $500,000 to her beneficiary. 

Whole life also features a cash value account that builds over time to a level equal the face amount of the policy. Cash values may take several years to begin to really build up. You don't really own the cash value account, the insurance company does. If you need the money, the company will make a low-interest loan of the money to you. But if you die before you pay back the loan, the loan will be paid back out of the death benefit. 

For example, Mary has a $500,000 whole life insurance policy. Over the years, she has borrowed around $300,000 from the cash value. When Mary passes, her beneficiary will only receive $200,000. The life insurance company has deducted the loan amount from the death benefit. 

Whole life insurance can either be participating or nonparticipating. Participating whole life policies cost more and contain the intention of returning some part of the premium to the policyholder each year in the form of a dividend. Nonparticipating policies have no dividends or return of premium features, but cost less.

Whole life insurance does come with the certainty of having fixed premiums with a set death benefit. Many borrowers enjoy watching the cash value account build up, but they often don't realize that the only way to get it is to cancel the policy or take out a loan. The downside to whole life is that it is more expensive than term life and requires a buyer to be more knowledgeable of the intricacies of insurance.