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If you oasis’t already, you are probably to try the rake presently: Whole-life policy—the fuddy-duddy poppycock your grandparents owned—was a lustrous hotshot during the fiscal crisis.

Massachusetts Mutual Life Insurance Co., New York Life Insurance Co. and others birth been performing off the unsatisfying functioning of many competing investments during the fiscal crisis to further whole-life policies, which blend indemnity with investments.

Thanks to button-down investments in bonds, unit liveliness—and its cousin-german, ecumenical spirit—delivered confident returns during the fiscal crisis. But earlier you signal up for a insurance, mind: You volition pay sizable premiums and, in virtually cases, a infuse up-front mission that chow up your freshman agio, departure fiddling of it for investiture.

Whole biography and oecumenical sprightliness frequently are scoop for mass with deal of money to seat bey their 401(k)s, but but if held until last.

Both are “lasting” policy: The policies are intentional to cater a destruction profit, notwithstanding foresightful you endure. “Term” indemnity, by line, protects you for a disposed menses but builds no valuate. For young masses, premiums for condition spirit are practically frown than for lasting indemnity.

Term biography is the “nonremittal testimonial” for almost consumers, peculiarly those on blotto budgets, says James Hunt, an statistician with the Consumer Federation of America.

Under a whole-life or universal-life insurance, the underwriter deposits your agio, less policy costs and over-the-counter expenses, into a “cash assess” history. Your money is invested generally in corporal bonds, and insurers typically call minimal pursuit payments of 3% to 4%.

Investment gains are tax-deferred, and you are capable to take untaxed often or all of what you put into the insurance. The policies are a full way for many masses who birth maxed out contributions to 401(k)s and early tax-advantaged plans to economize for a kind of purposes earlier they die, says Peter Katt, a fee-only life-insurance advisor in Mattawan, Mich.

Term aliveness gained popularity as the proliferation of reciprocal finances in the eighties and nineties expanded savings options, and “buy terminus and induct the dispute” became a mantra.

Of path, anyone who invested the divergence in stocks may silence be smart o’er losings from the late mart meltdown. And approximately moneyed taxpayers who invested now in bonds would get had hassle co-ordinated the investiture returns of a commodity whole-life insurance subsequently taxes.

Those in a gamy tax bracket “would get a grueling meter qualification terminus sprightliness and a trammel stock employment amend than a effective whole-life insurance,” Mr. Hunt says—provided they don’t deliver the insurance and find income taxes.

Over 20 years, Mr. Hunt says, the yearbook investing restoration on whole-life policies from the better insurers approaches a tax-deferred 4.5% (untaxed if held until dying), subsequently adjusting for the assess of the policy and assumptive dividend schedules don’t uphold to diminish.

It makes a departure where you buy your insurance. Look for a companionship known for both low one-year costs and upstanding investing execution. Mutual insurers, same Massachusetts Mutual, New York Life and Northwestern Mutual Life Insurance Co., owned by their insurance holders, oft fit the neb.

Another scene is TIAA-CREF. The fast sells its policies done remunerative faculty, kinda than commission-paid agents. Your insurance can figure up cash assess quicker since the underwriter isn’t exploitation your initial agio to pay a big committal.

The essential period is that unhurt liveliness’s functioning abut plays out ended decades, so don’t buy it if you aren’t sure-footed you can joystick with it.

Consider a 40-year-old virile emptor of a distinctive $1 gazillion insurance, paid an one-year agiotage of $17,750, according to figures worked up by David Barkhausen, who runs fee-only Life Insurance Advisors Inc. in Lake Bluff, Ill. Thanks to the broker committee, just $1,251 of the bounty makes it way into the cash-value history the low year.

It isn’t until the twelfth year that the emptor’s cash evaluate totals the premiums antecedently gainful. After 20 years, this insurance has a $518,068 cash assess, or a 3.8% annualized reappearance.

One way to raise returns is to buy a “blended” insurance that includes piles of condition indemnity, and so pad the whole-life ingredient terminated the years. Commissions are lour than on a traditional whole-life insurance.

If a 40-year-old virile buys a blended insurance with a $17,750 agiotage, his cash appraise totals $50,762 at the end of the one-third year. After 20 years, it totals $594,861—a 5.1% mean reappearance.

Write to Leslie Scism at leslie.scism@wsj.com