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The Misconceptions of Group Whole Life Insurance

Phyllis Falotico headshot

By Phyllis Falotico

Head of Worksite Marketing and true believer that good financial health and well-being for today's working Americans begin with their workplace benefits.

Posted on: February 22, 2023

Group Whole Life Insurance (GWL) is a lot of things, but what it’s NOT is limited when it comes to its many features and benefits. And despite the available education around GWL, it’s often misunderstood by your clients and their employees.

I normally focus on the value of voluntary benefits holistically in my blogs, but the misinformation around GWL has me concerned—especially for working Americans who may not be taking advantage of their workplace access to such robust protection products. I’d like to share what I believe to be the top three misconceptions. Some may be familiar to you, but they bear repeating.

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Misconception #1: GWL is a bad investment and doesn’t generate a good rate of return.

When I read this statement, I think, “as compared to what?” First, it tells me the person is confusing Group Whole Life insurance with an investment such as stocks, bonds, mutual funds, and so on. This isn’t an either/or choice. They have two different purposes. GWL is an insurance product (not a security), that helps to provide financial protection. It can help provide income if you are not there tomorrow. It could also provide access to the available cash value or other features if you need them in the future.1 (We’ll get to that last part in a minute.) Whereas investments are vehicles to help build and accumulate wealth. Both are important, but they have separate purposes and it’s comparing apples to oranges as they say.

Where I would say GWL could be considered an asset is if you think of it as an investment in yourself and the ones that count on you. Isn’t that more relevant? Insurance in the workplace provides working Americans the opportunity to obtain life insurance protection for themselves today and their family tomorrow—along with additional features they may be able to tap into throughout their lifetime, which brings me to the next misconception.

#2: GWL only pays out when someone dies.

It’s the word “only” in that statement that really troubles me. While the purpose of any life insurance product is to provide a death benefit, GWL has so much more. But I want to pause for a moment because there is an opportunity for benefits producers here. One reason it may be challenging to promote a more complex solution is expanding the conversation with clients around death benefit protection for employees.

GWL provides an opportunity to go beyond death benefits. Most people know that feature, but they may not be familiar with the living benefits. All group whole life products offer living benefits, and I cannot speak for others, but I can tell you our GWL offers three guarantees—guaranteed level premiums, guaranteed cash value growth and a guaranteed death benefit. Additionally, MassMutual’s Group Whole Life insurance has other riders and features such as a chronic care benefit2 and the potential to receive dividends.3 I’m not going to go into detail here because my point is GWL is far from “only” a death benefit product and you can improve your client engagement by also emphasizing that point.

Misconception #3: Clients tell you their employees have Group Term already.

Ah yes, the never-ending comparison of Group Term versus Group Whole Life. I know there is a great deal of content out there that pits the two against each other to help explain the value of GWL. But that’s just it…it’s not a competition!

The question isn’t which one, the question is helping your clients understand the value of both. It’s like going into a meeting and two people have separate skills that complement the overall solution. In this case, it’s the improvement of working Americans’ overall financial well-being. It’s like that old candy bar commercial pitting peanut butter against chocolate, but it turns out they go well together—if you like both.

It’s a worthwhile conversation to have with your clients and it may lead to overcoming the first two misunderstandings. Think of Group Whole Life as a cornerstone for the voluntary benefits offered at work that can help meet today’s working Americans short- and long-term financial needs, and best of all can follow them wherever they go.

Help transform the voluntary benefits landscape by helping your clients overcome these misconceptions…and continue to help us make Worksite Better.

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1Access to cash values through borrowing or partial surrenders will reduce the certificate’s cash value and death benefit, increase the chance the certificate will lapse, and may result in a tax liability if the certificate terminates before the death of the insured.

2Riders and other features, such as the Chronic Care Accelerated Death Benefit for Chronic Illness provision under the certificate, may be available for an additional premium or have a fee when exercised. Availability of these features may be limited based on issue age or state of issue. The Chronic Care Benefit is not yet approved in MA. For further details contact a MassMutual representative.

3Dividends are not guaranteed. The certificate is eligible to receive dividends beginning on the second anniversary.


The product and/or certain features may not be available in all states. State variations may apply.

Group Whole Life Insurance (GPWL), (policy/certificate forms MM-GPWL-2014 and MM-GCWL-2014, and MM-GPWL-2014(NC) and MM-GCWL-2014 (NC) in North Carolina), is level-premium, participating permanent life insurance. The GPWL policy and GCWL certificates are issued by Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001.