Whole life insurance provides for a level premium and cash value included in the policy which is guaranteed by the insurer.  The primary advantages of whole life are guaranteed death benefits, guaranteed cash values, fixed and known annual premiums.

Death benefits are guaranteed.  There are riders available (at additional cost) which does allow the death benefit to increase. The death benefit can also be increased through the use of policy dividends.  The death benefit is paid only to the beneficiary at the time of death.  The policies cash values are generally kept by the insurance company and exist simply to support the product’s death benefit.

Premiums are much higher than other forms of insurance in the short-term, but cumulative premiums are roughly equal if policies are kept in force until average life expectancy.  Premiums for participating whole life insurance policies are usually higher than for nonparticipating policies

Cash value can be accessed at any time through policy "loans" and are received "income-tax free". Since these loans decrease the death benefit if not paid back, payback is optional. Cash values support the death benefit so only the death benefit is paid out.

Dividends can be utilized in many ways. First, if Paid up additions is elected, dividend cash values will purchase additional death benefit which will increase the death benefit of the policy to the named beneficiary. Another alternative is to opt in for 'reduced premiums' on some policies. This reduces the owed premiums by the unguaranteed dividends amount. A third option allows the owner to take the dividends as they are paid out. Dividends cannot be guaranteed and may be higher or lower than historical rates over time. (Some insurance carriers may provide all or less options than these - it depends on the company).

Participating whole life insurance also have guaranteed premiums, death benefits and cash values, but these whole life insurance policies also pay a dividend based on the profits earned by the insurance company issuing the policy. In effect, you are "participating" in the company's earnings.