Whole life insurance is so called because it provides the insured with permanent protection for the "whole of life." Whole-Life provides you with protection, but it also builds cash value and does not have an expiration period or "term". Whole life insurance is typically more expensive than term insurance because part of the premium you pay to the insurance company on a whole life policy is invested in stocks, long-term bonds, mortgages and other assets that can appreciate in value and generate income over time.

The "cash value" in this policy is built up from the income on these investments over time. You can borrow up to the full amount of your cash value for any purpose. You can also use the policy dividends paid annually to cover some or all of your policy premium. At retirement, you can convert your accumulated cash value into an annuity, which would provide you with a guaranteed monthly income for life.