A more thorough explanation:

Whole life insurance, also known as permanent life insurance, is a type of life insurance policy that provides coverage for the entire life of the policyholder. As long as the policyholder pays the required premiums, the policy will provide a death benefit to the beneficiaries when the policyholder dies.

Unlike term life insurance, which only provides coverage for a specific period of time, whole life insurance policies are meant to last until death. In addition to the death benefit, whole life insurance policies also have an investment aspect. The premiums paid by the policyholder go towards both the death benefit and an investment account.

The investment portion of the premiums can build value over time, with many policies offering a guaranteed return rate. The policyholder can also take money from the cash value of the investment account during their lifetime, but this can reduce the death benefit for the beneficiaries.

For example, let's say John has a whole life insurance policy with a death benefit of $100,000 and a cash value of $50,000. If John decides to withdraw $10,000 from the cash value, the death benefit will be reduced to $90,000.

Whole life insurance policies can be expensive compared to other types of life insurance, but they offer a lifelong death benefit guarantee. The cash value of the policy may either go to the beneficiaries or the insurance company when the policyholder dies, depending on the terms of the policy.

It's important to note that there are tax considerations for whole life insurance policies. The investment portion of the policy builds value tax-free until withdrawal, and any value that is withdrawn greater than that paid into the policy will be taxed. Individuals may also exchange their current policy for another or for qualified investment alternatives, but they must follow specific tax guidelines to avoid being taxed in between the exchange.