Whole Life Insurance
Whole life is a guaranteed product that is good until you are alive. When you purchase whole life from a privately held (mutual company), you are the policy owner, and you are the shareholder and the dividends, and guaranteed rate of return will come to you. Most companies have you covered until age 121. All life insurance companies sold whole life until they went public. Once public, there are different shareholders and most companies will pay policy owners a little or no dividends. So if you plan to buy a whole life, please buy it from a mutual company. While purchasing a whole life insurance, under the premium difference, dividends and the loan provisions from different companies.
Premiums duration varies. You can decide to pay the whole life off in 10, 20, 30, age 65, or you pay until age 121. Shorter the premium paying period, higher the premiums.
You can always take a loan from your policy, usually 80-90% depending on your age. You are also allowed to withdraw the dividends from your policy without taking loans.
In conclusion, buy whole life if you have maxed out your 401k and other retirement accounts. Purchase enough term policy to cover your liabilities, and you have money sitting around that you will never take a risk.
As its title indicates, whole life insurance provides a lifetime death benefit for a set premium amount and builds cash value you can use while you’re living.
The strength of a whole life insurance policy is that it provides guaranteed cash values and benefits in return for fixed premiums. A trade-off to consider is that a whole life policy may build cash value at a lower rate than alternative coverage options.
Who Should Buy Whole Life Insurance?
A whole life insurance policy is recommended if you want permanent insurance and more complete guarantees than a universal life policy can provide. While the premiums are high, you’ll receive a lifetime of coverage at a set premium with a guaranteed death benefit, and cash value that you’ll be able to borrow against over time. When a term life insurance ends, your coverage ends. Whereas in whole life the coverage is for your whole life. Whole life insurance is very different from other life insurance plans. Understanding how they work will help you to know the product better.
The key benefit of whole life insurance is that it gives you cash value after a specific period of time which can be used for your personal stuff. In simple words, you don’t have to die to use the benefits of the policy. The advantage of permanent insurance is that your health at the time the policy is issued will dictate the terms of your insurance for the rest of your life.
- Permanent Coverage
- Cash Value
- Retirement and Estate Planning