Whole Life Insurance, Everything You Should Know

What is whole life insurance?

Whole life insurance is a type of permanent life insurance that provides lifelong coverage with a guaranteed rate of return and premiums that are typically locked-in as long as all premiums are paid on time. A whole life insurance policy also offers a savings component that enables the policy to build cash value that could last until you die.

Compare whole life insurance rates

As you search for whole life insurance quotes, there are specific things you need to keep in mind. Most people consider two factors: the cost of the whole life insurance premiums and the expected growth of the policy’s cash value. When you quote whole life with us, we’ll help you choose a policy that fits your specific needs.

How does whole life insurance work?

Once you’ve selected the type and amount of coverage, your insurance company will split the premium — one part goes into a cash value account, and the rest covers the life insurance costs of your policy. Over time, your cash value will grow, and you’ll have the option to borrow against it, assuming you’ve been paying your premiums. You can take out a loan against the cash value or use it to supplement other retirement income.

What are the benefits of whole life insurance?

Whole life insurance coverage offers a variety of valuable benefits, such as:

Lifetime coverage

Unlike term policies that can expire after 10 or 20 years, whole life insurance lasts until the policyholder passes away — as long as payments are up to date.

Guaranteed growth

Whole life insurance builds tax-deferred cash value over the life of your policy. With every premium payment you make, a portion goes towards your policy’s cash value. As the value increases over time, you may be able to borrow against it or withdraw it. Keep in mind that borrowing or withdrawing funds from your policy without repayment will reduce the cash value and death benefit.

Stable premiums

You pay the same amount for your policy every month, guaranteed. Ideally, the payment amount will become more affordable over the years and your premium will never increase.

Tax-free payouts

A whole life insurance policy typically provides a lump-sum, tax-free benefit to your beneficiary.

How much does whole life insurance cost?

The cost of this type of policy depends on several factors, such as your age, health, and how much coverage you determine you need. The insurance company you select can also be a factor, as rates vary from one company to another.

What does a whole life insurance policy cover?

Whole life insurance is built to serve your long-term financial goals, including:

  • Estate planning
  • Retirement
  • Funeral and burial costs
  • Inheritance funds

How does whole life insurance differ from term life insurance?

While both provide a death benefit, term life insurance only provides coverage for a specified amount of time. Whole life, on the other hand, provides coverage for a lifetime, as long as the premiums are paid. With whole life your premiums remain the same, while term life premiums go up when you renew the policy. Whole life also has a cash value, which you can withdraw as a loan. Term life does not offer this option.

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