Preparing for Retirement: Whole Life Insurance

Whole life insurance is different from term life insurance in that it's an investment. With every premium you pay, you are creating cash value in the policy. Whole life insurance can be considered a retirement investment because you can withdraw money from this account when you retire. If you cash in the policy, you'll pay tax on the difference between what you receive and the premiums you've paid. If you borrow against the cash value of the policy, you won't be taxed on what you borrow, but you'll have to pay interest at a fixed rate on the loan.