If you have a family that depends on your for financial support, you need some form of life coverage. A life insurance policy will pay a benefit to your family at the time of your death. The money can be used any way your beneficiaries wish. There are many types of life insurance policies and it is important to know what to choose.What is whole life insurance? Whole life insurance provides permanent coverage. This means that the policy will not expire as long as you keep paying the premiums. This policy type comes with an extra component: a savings account. A part of the amount you pay as premiums is deposited in the policy’s account. The cash value grows at a fixed or variable rate. After five or ten years, depending on the policy, you can withdraw money from the account. If the policy gets canceled, the insured received the cash value. You can also borrow against the policy and it works just like a normal loan. If you don’t manage to pay your debt before you die, the agency will pay the amount from the policy’s coverage value. But keep in mind that this will lower the benefit received by your beneficiaries. When do you need it?A whole life insurance policy is a very long-term investment. The cash value grows at a very small interest rate, so you’ll have to wait many years before you save a substantial amount of money. If you think that you’ll need life coverage during retirement, a policy can bring many benefits. This means that you will have dependents into your late 60s. Even if this doesn’t happen and your family doesn’t need the money, you can borrow against the policy to cover retirement expenses. You can also keep your permanent life coverage to pay for your funeral.You can also use life coverage as an estate planning tool. By transferring ownership of the policy to one of your family members you can avoid paying some taxes. Also, since the policy’s benefit is tax-free you can use it as a way to transfer money to your heirs. For example, you can buy a $1 million policy and pay for it by liquidating a part of your assets.So, do you need whole life insurance? Yes, if you think that your family will need financial protection when you are retired or if you are wealthy and want to protect your asses from estate taxes.