Permanent and Whole Life Insurance . What is Permanent Life insurance? Also called whole life insurance, offers lifetime protection. Was main product of life insurance in U.S; sold to replace income before there was social security or welfare system-now more fancier and EXPENSIVE o Part of premium pays for insurance protection-mortality charge. This charge rises as you get older whether you buy a cash value policy or a term policy o Other part of premium goes into a legal reserve (regulated by state law) which is used later to pay for the increasing costs of insurance protection. Reserve earns whatever the rate of return the COMPANY earns on its investments and policyholders rarely know what the rate is (SIGNIFICANT drawback for investor who wants to compare rates