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Whole Life Insurance
Whole life insurance is a type of permanent life insurance. Like any life insurance policy, it pays out a death benefit to an appointed beneficiary when you die as long as the policy is in force. Unlike term life insurance policies, which expire after a predetermined term, whole life insurance policies remain in effect as long as the premiums are paid.
Whole Life Insurance Cash Value
Whole life policies can offer more than just financial protection against the effects of one’s death. Rather, whole life insurance policies accrue cash value over the life of the policy.
This means you obtain several additional benefits. For one, you may be able to take out a loan, and use your insurance policy as a form of collateral. Additionally, your policy may allow you to withdraw funds against the policy’s accumulated cash value.
Costs and Benefits
In general, term life insurance policies are less expensive than whole life insurance policies. However, it’s important to remember that individual plans can vary greatly in cost, depending on your health and on the insurance company.
It’s important to note, too, that with whole life insurance:
- Your premiums will likely stay the same from year to year
- The policy’s cash value will continue to grow at a predictable, guaranteed rate
- There's no term, which means the policy stays in force for the policyholder's entire life
Is Whole Life Right for Me?
Although it has some benefits, whole life insurance isn't right for everyone because it can be expensive. According to Investopedia, whole life insurance may be right for you if you fall into any of the following categories:
- You to replace your income for your family's expenses when you die
- You wish to fund requests from charities
- You need to liquidate business debts, mortgages or provide family members with funds to pay down debts
- You want to ensure the payout from your life insurance policy is paid out quickly to your surviving family members
Speak With an Agent
For more information about your life insurance options, speak with a licensed agent at 800-966-7169 or read through our guide, Determining Your Life Insurance Needs.
*Applications for insurance may be subject to acceptance by insurer. Rates and coverage amounts will depend upon the carrier selected.