Whole Life Insurance
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Whole Life Insurance Quotes
Whole Life Insurance is the most basic form of permanent life insurance coverage. The insured person is covered for life (sometimes until age 100), and a portion of the policy is invested by the insurance company, building cash value on a tax-deferred basis over time.
With Whole Life Insurance, the premium and death benefit are determined at the start and remain the same throughout the life of the policy. The policy is guaranteed not to lapse, provided you pay your premiums. So, once you’re covered, you stay covered, even if you develop a severe health problem.
What Whole Life Insurance Is Not
This isn’t Term Life Insurance, where premiums can increase during your lifetime. The premium and face amount of the policy are fixed for life. In most cases, Whole Life Insurance is more expensive (at least in the short run) than Term Life Insurance.
Unlike some variations of Whole Life Insurance (like Universal and Variable Life Insurance) the insurance company makes all the investment decisions, so there tends to be less flexibility in how or where the money is invested.
Who Needs Whole Life Insurance?
Whole Life Insurance is a good choice for people who want their life insurance portfolio to incorporate some savings element, and who desire stability and ease of use. It is well suited for people who don’t want to monitor their investments continually, who would rather leave those decisions up to “the experts.”
Things To Think About
Determining the amount of coverage you need takes careful and advanced financial planning. You want to make sure you have enough coverage, but not so much as to become unaffordable. Failure to make premium payments could result in the loss of the entire investment.
Find out if a Whole Life Insurance policy allows you to borrow against it once it builds up to a certain cash value. Also find out if it ever pays dividends in addition to interest rate accrual. Some do, some don’t, but dividends are rarely, if ever, guaranteed.
Some Whole Life Insurance policies offer a limited payment option in which premiums end at age 65. Some offer an interest sensitive variation, where the cash value of the policy fluctuates according to prevailing interest rates.
If you are interested in Whole Life Insurance, but are between the ages of 50 and 75, then you may want to consider Guaranteed Whole Life Insurance. Usually, no medical exam is required and your family can enjoy the benefits of financial security.
Frequently Asked Questions (FAQs)
Get clear answers to common insurance questions and important details to guide your coverage decisions.
What is whole life insurance?
Whole life insurance is a type of permanent life insurance that provides coverage for the insured’s entire lifetime, as long as premiums are paid. It features fixed premiums, a guaranteed death benefit, and a cash value component that grows over time. The policy remains in force until the insured’s death or until the policy’s maturity, which is typically at age 100 or 121.
Who should consider whole life insurance?
Whole life insurance is ideal for individuals seeking lifelong coverage, those who want to build cash value over time, and people with high net worth looking for estate planning tools. It is also suitable for those who prefer fixed premiums and a policy that does not expire.
What are the different types of whole life insurance policies?
Whole life insurance policies include participating (policyholders receive dividends based on the insurer’s financial performance), non-participating (no dividends are paid), guaranteed issue (no medical exam required, typically more expensive), simplified issue (requires answering health questions but no medical exam) and universal life (offers more flexible premiums and death benefits).
What does whole life insurance cover?
Whole life insurance provides death benefit, cash value and fixed premiums.
What is not covered by whole life insurance?
Whole life insurance does not cover deaths due to suicide within the first two years, deaths resulting from criminal activities or certain exclusions specified in the policy, such as acts of war or terrorism and Policy loans and withdrawals that reduce the death benefit if not repaid.
How much does whole life insurance cost?
The cost varies based on age, health, coverage amount, and additional features. Generally, whole life insurance premiums are higher than term life insurance due to the lifelong coverage and cash value component. For example, a $500,000 policy for a healthy, non-smoking individual can cost significantly more than a comparable term policy.
How can I save money on whole life insurance?
You can purchase early, compare quotes, consider simplified issue and review policy features.
