Whole Life Insurance: Lifelong Financial Protection
Because term insurance has a set end, whole life insurance remains in effect your entire life. It defends your finances and the value keeps improving over time, so it’s ideal for long-term plans.
What Defines Whole Life Insurance?
A whole life insurance policy lasts your whole life. When you have regular premiums, the insurance company vows to give your beneficiaries a fixed lump sum amount upon your death — as long as the policy is still effective. Part of your policy is set up to grow which is known as “cash value” and allows you to borrow it or access it down the road.
Why is whole life insurance a good choice?
- Your family will be covered for life, whenever you pass away.
- Allows you to gain cash value you can benefit from over your lifetime.
- Your premiums will never increase during your lifetime.
- Being part of your financial and estate plans is possible.
Let’s go over the operation of Whole Life Insurance.
- Every month, you have to pay the same amount in premiums.
- Some of what you pay covers the insurance policy and some increases as the cash value of your policy.
- Money in your cash value plan grows free from taxation and you can borrow or withdraw funds.
- Upon your death, your beneficiaries will receive the death benefit you choose.
Who Are the Beneficiaries of Whole Life Insurance?
- Those who need coverage that lasts their whole life.
- Individuals who would like their insurance to include savings or an investment plan.
- Anyone who will leave inheritance or must submit to estate taxes.
- Anyone who wants sure and steady premiums and long-term security.
What You Should Know About Whole Life Insurance
- You typically have to pay more for whole life insurance than you do for term life insurance.
- Usually, the value of your cash in a life insurance policy rises gradually each year.
- If the loan isn’t repaid, the death benefit will be lower.
- You should understand what you want and your budget before you buy.
FAQ
What does whole life insurance mean?
It is a life insurance policy that lasts your entire life and allows your cash value to build.
Is it possible to borrow money on my whole life policy?
Borrowing money against the cash value of your policy is possible.
Is it more expensive to get life insurance through a policy than getting term life?
It is usually true that whole life premiums are higher.
Should the cash value collect interest?
Any earnings in your policy grow tax-free and there may be dividends based on the insurer.
Can I take back my life insurance?
However, calling to cancel could reduce your plan’s benefits and cash value.
