If a life insurance company goes bankrupt, what happens to whole life insurance benefits?

Sit back and relax my friend. The fact of the matter is that insurance companies do not go bankrupt in the normal sense. They simply get acquired by other insurers. Sounds like your dad may have had a hybrid policy that has an investment component to it. The investment is not doing well and isn't covering the cost of maintaining the policy costs. Hard for me to advise further without seeing the policy etc. But in any case don't be concerned about the solvency of the insurance carrier.