<P> Whole life premiums are much higher than term insurance premiums, but because term insurance premiums rise with increasing age of the insured, the cumulative value of all premiums paid under whole and term policies are roughly equal if the policy continues to average life expectancy . Part of the insurance contract stipulates that the policyholder is entitled to a cash value reserve that is part of the policy and guaranteed by the company . This cash value can be accessed at any time through policy loans that are received income tax - free and paid back according to mutually agreed - upon schedules . These policy loans are available until the insured's death . If any loans amounts are outstanding--i.e., not yet paid back--upon the insured's death, the insurer subtracts those amounts from the policy's face value / death benefit and pays the remainder to the policy's beneficiary . </P> <P> Whole life insurance may prove a better value than term for someone with an insurance need of greater than ten to fifteen years due to favorable tax treatment of interest credited to cash values . However, for those unable to afford the premium necessary to provide adequate whole life coverage for their current insurance needs, it would be imprudent to purchase less coverage than is adequate as whole life insurance rather than purchase an adequate level of term to cover their current need . </P> <P> While some life insurance companies market whole life as a "death benefit with a savings account", the distinction is artificial, according to life insurance actuaries Albert E. Easton and Timothy F. Harris . The net amount at risk is the amount the insurer must pay to the beneficiary should the insured die before the policy has accumulated premiums equal to the death benefit . It is the difference between the policy's current cash value (i.e., total paid in by owner plus that amount's interest earnings) and its face value / death benefit . Although the actual cash value may be different from the death benefit, in practice the policy is identified by its original face value / death benefit . </P> <P> The advantages of whole life insurance are its guaranteed death benefits; guaranteed cash values; fixed, predictable premiums; and mortality and expense charges that do not reduce the policy's cash value . The disadvantages of whole life are the inflexibility of its premiums and the fact that the internal rate of return of the policy may not be competitive with other savings and investment alternatives . </P>

All of the following are advantages of saving through life insurance except