Whole life insurance is a popular type of permanent coverage. It can last your entire life, has a guaranteed death benefit and provides guaranteed cash value growth. Whole life is more expensive than term life insurance, which covers you for a fixed number of years only and doesn’t build cash value.

Whole life is a type of permanent life insurance. It pays out regardless of when you die and includes cash value — an investment component. When the policy has built enough cash value, you can withdraw or borrow against the funds while you’re still alive. Unlike other types of permanent coverage, the cash value in a whole-life policy is guaranteed to grow at a set rate.

Whole life insurance premiums stay the same throughout the length of the policy and the death benefit is guaranteed. If there are no outstanding cash value loans or withdrawals when you die, your life insurance beneficiaries receive the full death benefit.

Guaranteed death benefit: The death benefit for whole life insurance is guaranteed; it won’t decrease or change over time as long as you pay your premium. Though whole-life policies are considered lifelong, many mature upon the insured person reaching a certain age, such as 100. When the policy matures, the death benefit is paid to the policyholder or coverage can be extended until the insured’s death. Therefore, even if you outlive the policy’s maturity date, the death benefit is guaranteed to pay out.

Guaranteed cash value: The cash value in a whole life insurance policy is guaranteed to grow at a fixed rate set by the insurance company. A portion of your insurance premium funds the policy’s cash value, which grows over time. You can withdraw or borrow against the funds while you’re still alive. But keep in mind that withdrawing or borrowing against the policy’s cash value without paying it back can reduce the death benefit — the amount your beneficiaries receive when you die.

Fixed premiums: Whole-life premiums are typically fixed, which means they remain level throughout the length of the policy. If you miss a premium payment, your coverage can lapse. In some cases, funds from the cash value can be used to cover the missed premium. But this perk may not apply to all policies.

Dividends: When you buy a whole life insurance policy from a mutual company — one owned by its policyholders — you may receive dividends if the company performs well. Dividends typically aren’t taxed as income. Depending on the terms of your policy, you may be able to use the dividends to increase the death benefit or pay your premiums.

Learn more about whole life insurance and find the best policy for you.

1. Compare quotes from various insurers to get the best price possible.

2. Select life insurance policies with the same level of coverage to get the most accurate comparison.

3. Check the features of each life insurance policy you compare. Some policies may include free life insurance riders that provide additional features, while others may have to be added at a cost.

When you’ve found the right life insurance policy, it’s time to apply. Collect the information you need before you start the life insurance application process. You’ll likely need to provide details about your current and past health conditions, as well as your family’s health history. The insurer may need your consent to get medical records and ask you to take a life insurance medical exam. Insurers also check other sources, such as MIB Group, which collects data on medical conditions, your driving record and hazardous hobbies.

Term life insurance is often defined as temporary coverage because it only lasts for a limited number of years. Although lifelong coverage may sound more appealing, there are many advantages to term life worth considering. It’s cheaper than permanent life insurance, plus the shorter coverage is typically sufficient for most people. That’s because life insurance is designed to provide a safety net to anyone who relies on you financially, which may only be for a set period of time. For example, if you want life insurance to replace your income, a term life policy can cover your salary during your earning years. After that time, you may no longer need coverage.

Term life is the simplest type of life insurance. It covers you for a set number of years, such as 10 or 20. If you die within the term of the policy, your life insurance beneficiaries receive a death benefit. You can typically buy term life insurance in 1-, 5-, 10-, 15-, 20-, 25- or 30-year increments.

Term length. This refers to the number of years the policy is in effect. For example, if you buy a 20-year term, the policy will expire after 20 years. At that point, you may have the option to extend your coverage or convert it to a permanent policy.

Riders. Life insurance riders can be added to both term and permanent policies. They act as additional coverage for either the policyholder or another person. For example, when you buy term life coverage for yourself, you may be able to add a rider that covers your spouse as well.

Same-day coverage. Due to its simplicity, you can often buy instant term life insurance online. In some cases, coverage can start the same day.

Level term life insurance. This type of policy has a fixed death benefit. The coverage amount you buy at the start of a level term life policy doesn’t change, and your beneficiaries receive the full amount if you die during the term.

Decreasing term life insurance. This type of policy has a decreasing death benefit and is often used to cover a specific debt like a mortgage. As you pay down the debt, the life insurance face value also decreases. Decreasing term life is typically cheaper than level term life due to the diminishing death benefit.

Annual renewable term life. This type of policy covers you for one year, with the option to renew after the year is up. Premiums typically increase after each renewal, making annual renewable term life advisable only if you have a short-term need for coverage.

Learn more about term life insurance and find the best policy for you.