[jorian]

Whole life insurance differs from term in that the premiums never rise and the former "endows" at a certain age meaning the face value is paid out regardless of whether the policy holder is alive or not. Prior to this age the policy will have a "cash value" should you stop paying premiums or wish to cash out. The cash value is calculated by subtracting the actiual cost of the insurance/admin from premiums paid to date.

Personally I have term and invest the difference myself. Way better yield. Whole life can be a forced savings plan for the undisciplined, the return is low but hey, at least youre not spending everything. Universal life is an alternative which is cheaper but with premiums that can and do rise during the life of your policy. It has the cost of ins/admin subtracted from your premiums with the balance invested in a "side fund." There are some possible tax advantages but again you are better off IMHO buying term while the risk of your death poses a major financial setback to your family IE: your the major bread winner and you have kids/mortgage. Just my .02 cents.

PS: I sold the stuff in a former life.