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Insurance

Last updated November 3, 2026

Insurance covers term life, whole (permanent) life, disability and long-term-care policies. Most of it matters in a survivor scenario or a long-term-care cost window. The whole life premium is the exception, because it affects every year of your plan.

For couples, a term life policy's face amount and a pension's survivor percentage feed the survivor view in Compare. Your everyday paycheck figure always assumes you both stay alive.

A term policy prints two dates, and they mean different things. The expiration date, usually around age 90, is when the policy finally ends. The level premium period is how long the quoted premium lasts. It's the number in the name, such as 20 for a "Term 20". After that, the policy goes on at rates that rise every year and climb steeply. That's why most households drop it there.

Your plan models the level premium period, because that's the part anyone can price. Covering you to age 90 at a premium set in your forties would overstate both the cover and how cheap it was.

A third date, the term conversion expiry, is different again. It's your deadline to swap the policy for a permanent one without a medical exam. Carriers often set it a couple of years before the level period ends.

Permanent life insurance, such as whole life and variable universal life, is any policy that doesn't expire and builds a fund inside it. It's three things at once, and your plan needs all three. The premium never stops, so it counts as spending in every year of retirement. The death benefit never expires. The fund inside the policy, its cash value, is an asset, so it counts toward your net worth.

The kind you have decides how that fund grows. With traditional whole life, the insurer decides what the fund earns. They declare a rate, usually with a guaranteed floor. You choose nothing, and the stock market has nothing to do with it.

With variable universal life (VUL), the fund is invested in sub-accounts you picked, which are much like mutual funds. It rises and falls with those markets, and no rate is declared. Your policy document says which kind you have, and a policy number with "VUL" in it is a strong hint. Pick the right one. Your plan grows a whole life fund at a steady rate. It puts a variable one through the same thousands of simulated markets as the rest of your money, so it can fall as well as rise.

The cash value isn't money your plan can spend to get through a bad year. Getting at it means surrendering the policy, which ends the coverage. So that's a choice you make yourself, with "cash it in at age", and never something the plan does for you quietly.

If you cash it in, the gain above the premiums you've paid is taxed as ordinary income that year, not as capital gains. The premium stops, and the death benefit ends. The cash value grows at a flat rate above inflation. It isn't simulated against the market, because your insurer sets the crediting rate, not the stock market.

From those four figures, the section works out what the policy has returned so far. It shows what went in, what it's worth now, over how many years, and the rate that implies before and after inflation. Inflation here is what prices did over that period, not a guess about the future. We don't ask for anything extra. A level premium times the months since the effective date is what you've paid in.

That rate is also what your plan grows the cash value at from here, which leans cautious. Whole life takes most of its costs in the early years. So an established policy is likely to do better from now on than its own lifetime average suggests.

The other choice was a field asking how fast the cash value grows above inflation, which no household has to hand. So the plan works from what the policy has done. We report it without judging it. The same premiums also bought coverage for the whole period, and what that was worth to you isn't something a simulation can price.

A long-term-care policy's daily benefit offsets the long-term-care cost window you can set up in the Spending section, day for day, if you've turned that on.

Disability coverage is a yes or no checkbox only. We don't collect a benefit amount, so it isn't modeled in your results yet.