Whole life insurance
Benefits of whole life insurance
- Whole life can be more expensive than other types of life insurance policies.
- The amount of your premiums and the face value of your whole life policy are not adjustable should your financial needs change.
- Depending on your situation, you may not need this level of coverage for your entire life and could overspend for coverage you don’t need.
- Whole life may not be a good choice if you will need access to money in the short term. Often, whole life policies come with a surrender charge period, during which you would pay a penalty if you surrender your policy.
- Your policy may need to reach a minimum value before loans are allowed.
There are a few simple questions that can help you determine if a whole life insurance policy will meet your needs:
- Do you want a life insurance policy that will last a lifetime?**
- Do you feel the potential for earning cash value over time is worth the additional premium?
- Do you have a family history of health concerns that might make it difficult for you or a loved one to secure affordable coverage later in life?
- Do you think cash value could be a future benefit for liquidity, retirement, or estate planning?
- Do you need money to cover funeral expenses or to offset the cost of inheritance or estate taxes?
If you answered yes to any of these questions, then a whole life insurance policy may meet your needs for locking in permanent coverage and benefits for the future.
**Policy premiums must be made in order for policy to remain active.
Common questions about whole life insurance
Whole life insurance policies provide immediate, guaranteed death benefit coverage for the insured's lifetime, as long as required premiums are maintained. Whole life policies grow cash value at a set rate, which can be used for future needs.
While term life policies provide coverage for a limited time, i.e., 20 years, whole life policies offer a guaranteed lifetime death benefit (when required premiums are maintained) and grow cash value at a set rate. These tax-advantaged funds can be borrowed against for future needs.
Whole life insurance works by creating an immediate, guaranteed death benefit, with permanent coverage as long as required premiums are maintained. Whole life policies also grow cash value at a set rate, which can be borrowed against for future needs.
Several factors determine the cost of whole life insurance premiums, including the amount of coverage and the insured's age and health. Whole life offers a guaranteed lifetime death benefit (when required premiums are maintained) and cash value growth, which can make it more expensive than temporary policies.