An unpublished opinion out of Humboldt County helps us to understand what a whole life insurance policy is at divorce.
During the marriage Sharon and Charles purchased a whole life insurance policy insuring the life of Charles. At the 2007 divorce the cash value for the policy was determined, and each party was credited with half the value of the policy. After the divorce Charles kept making premium payments on the policy, and he changed the beneficiaries.
In 2008 Charles died. Sharon sued for half of the death benefit under the policy. She loses.
In dissolution proceedings, a whole life insurance policy is valued at its cash surrender value. To the extent the cash value is community property, it is divided between the parties. (See In re Marriage of Holmgren (1976) 60 Cal.App.3d 869, 871; Hogoboom and King, Cal. Practice Guide: Family Law (The Rutter Group 2012)
. . .[F]ollowing dissolution, when the insured remains insurable, the community retains no interest in the proceeds of the policy beyond the period for which community funds were used to pay the premium.
. . .
As compared to term life insurance, a whole life policy merely adds the additional element of an accrued cash value. In this case the cash value was properly divided as a community asset in the dissolution proceedings. Had Ross failed to pay the premiums on the whole life policy following dissolution of the marriage, coverage would have terminated. Once Ross began making premium payments with his separate property assets, the community no longer had an interest in the proceeds of the policy. The community received everything it bargained for: the accrued cash value and protection against the contingency of death during the period coverage was paid for with community funds.
 Black’s Law Dictionary (8th ed. 1999) page 946 defines “whole life insurance” as “Life insurance that covers an insured for life, during which the insured pays fixed premiums, accumulates savings from an invested portion of the premiums, and receives a guaranteed benefit upon death, to be paid to a named beneficiary.” “Term life insurance” is defined as “Life insurance that covers the insured for only a specified period. It pays a fixed benefit to a named beneficiary upon the insured’s death but is not redeemable for a cash value during the insured’s life.” (Ibid.)