Although you may be considering a whole life insurance policy to protect your love ones if you die, it can also be used as an investment in the future. While some investment plans are subject to taxes while the money is building up, the money invested in a whole life insurance policy is not. This can save you some money compared to other investment options.

How it works is that part of your premium payment is invested, while the other part is put towards your death benefit (what your beneficiaries receive if you die). You can potentially lose the money in the investment portion of your account, but your death benefit will remain in place. Most policies will allow you to determine which part is applied towards investing and while part is applied to your death benefit. You can receive the money from your investment portion or borrow against it at any time. What investment opportunities you can take advantage of and other stipulations will vary by company.

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