Policy Types

Five Financial Benefits to Buying Whole Life Insurance

There are financial benefits to purchasing whole life insurance (permanent/cash value) that can help you in financial planning; one being the cash value is not subject to stock market losses.

Whole Life Insurance Benefits

If you've been considering a whole life (permanent/cash value) insurance policy, you understand that unlike term life insurance (which provides coverage for a specific time period), a whole life policy is permanent*, and designed to provide coverage for your entire lifetime. However, what you may not know is that there are many financial benefits contained in a well-designed whole life insurance policy that stretch beyond the death benefit protection it provides.

When selecting life insurance, you should consider all your available options. To be helpful, we've put together a short list highlighting just a few of the financial features associated with a quality whole life policy.**

1. Whole life insurance protection.

The cash value that your whole life policy accumulates isn't subject to stock market volatility.

2. Cash Value growth.

Regardless of how stock markets perform, your cash value grows at a fixed rate. Over time, your policy builds cash value that is not subject stock market declines.

3. Additional income.

The cash value of a whole life policy can be converted into an annuity, which can provide you with additional income for life. This settlement option may not be offered by all carriers and may have tax implications. Be sure to consult a qualified financial advisor or tax professional to assess your specific scenario.

4. A source of cash.

There may be times when you need additional financial resources to help fund certain expenses. Your whole life policy can be a source of funds to help you meet these needs and other financial obligations. Unlike 401(k)s and IRAs that penalize you for accessing your money prior to reaching age 59 1/2, a whole life policy would allow you to borrow from available cash value for any reason and pay it back. However, interest will accrue and both the death benefit and cash value will be reduced by any outstanding loan balance.

5. Dividends.

Some whole life policies pay out annual dividends (money paid to you off the insurer's profits). This cash can be used to purchase additional life insurance (paid-up additions) that increases both the total death benefit and cash value of your life insurance policy. Keep in mind that dividends are not guaranteed.

The primary purpose of any life insurance policy is to provide financial protection for your loved ones when you die. For some, this could be term life insurance, while others find whole life insurance (or a combination of policy types) a better fit. However, before you decide to buy any type of life insurance, make sure you fully understand the key benefits and features of each and how they can benefit you and your family.

* As long as required premiums payments are timely made.
**It's important to note that not every insurance company or whole life policy offers all these benefits and features and that this is not an all-inclusive list.

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Whole Life Insurance Benefits

Exploring your life insurance options can become overwhelming. When considering a whole life policy, you should consider all of your available options. This article explores whole life insurance benefits including principal protection, guaranteed money growth, additional income, a cash source with no penalties and dividends. For more information, visit our learning center.


All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.

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