What is whole life insurance?
Whole life insurance is a form of permanent life insurance that provides coverage throughout your entire life. It has a guaranteed rate of return and the premiums paid are typically fixed. Premiums may change if payments are not made timely. Additionally, whole life insurance policies offer a savings component, so the policy can build cash value that could last until your passing.
Compare life insurance quotes
Just like home and car insurance, you need to shop and compare rates for life insurance. As you compare whole life policies, it’s important to compare the plans of competing insurance carriers, as well as their differences. You can start an online life insurance quote with us today and easily compare the premium, coverage amount, and policies offered by multiple excellent insurance companies.
WHY BUY WHOLE LIFE INSURANCE?
If you are seeking lifelong coverage and a policy that offers a savings component and borrowing options, then whole life is an option.
What are the benefits of whole life insurance?
Lifetime Coverage
Unlike term life policies that expire after a selected number of years, whole life insurance lasts until the policyholder passes away. Of course, premium payments have to be made and up-to-date.
Guaranteed growth
Whole life insurance builds tax-deferred cash value over the life of the policy. In fact, each premium payment made is a small contribution to the policy’s cash value. As the cash value increases, you may be able to borrow or withdrawal against it. Note: borrowing or withdrawing against the policy without repayment reduces the cash value and death benefit.
Predictable Premiums
Like a term life policy, 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
Tax-free is always good. The death benefits paid out from a life insurance policy typically does not create taxable income.
How much does whole life insurance cost?
The cost of a whole life policy depends on many factors. Things like your age, health, and how much coverage you require will impact your premiums. In fact, the insurance company you select or the plan can also be a factor, as rates vary from one company to another and benefits change.
Learn more about the costs of life insurance.
What does a whole life insurance policy cover?
Whole life adds in a savings and borrowing component, but other than that it’s funds can be used like other life insurance products. Whole life benefits can help your family or loved ones cover lost income and other living expenses and liabilities, such as:
- Mortgage or housing payments
- College tuition or other education expenses
- End of life, funeral and other burial costs
- Debt, such as an auto, credit card or business loans
However, because of the cash value and savings component, whole life can be included in your:
- Retirement, and
- Estate Planning
What makes whole life different than term life?
Both policy types provide a death benefit, however, term life insurance only provides coverage for a specified amount of time. Alternatively, whole life provides coverage for a lifetime. Of course, you have to make the premium payments. While term policies have guaranteed premiums during the active term, the premiums may increase at renewal. On the other hand, whole life premiums remain the same. Additionally, whole life provides a cash value that you can withdraw upon. Term life does not offer this option.
Learn more about life insurance
Life Insurance 101 is your go-to resource for any additional questions about life insurance.
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