Whole life insurance is the original permanent life insurance. It generally provides guaranteed premiums, guaranteed death benefit and a guaranteed cash value. Most companies which offered whole life insurance were mutual life Insurance companies at one time, now most are stock based companies. Just means some of the value of whole life, the participation as a policy owner in the company has gone away. Many companies still provide dividends back to the policy holders which help the policy build cash value or can be used to increase the death benefit for your beneficiaries.
What are the common reasons for purchasing a Whole Life Insurance Policy?
- The premiums remain the same and do not increase.
- Can provide a cash value account you can use for savings, emergencies or retirement.
- The protection is designed to last as it says, “Your Whole Life”
- You can use funds from these policies on a tax favored basis.
Who should buy Whole Life?
In general whole life is for your entire life, not just a specific term or time period. If your goals are to provide a death benefit that is there when you die, no matter how long you live, whole life is a fair alternative.
Final Expense is another reason people buy whole life policies. Small amounts of coverage usually offered on a simplified health question platform for the purpose of paying final expenses. Even if you have significant to Severe Health concerns you can purchase one of these policies if you are between the ages of 50 – 80.
Who should not buy Whole Life?
If you are looking to provide a significant amount of insurance for your family and are solving for many goals, pay off home, cover loss of income, provide for young children etc. Then generally you will do better in a Term Life Insurance Policy which provides a maximum amount of coverage for the least expensive price.
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