Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
A whole life policy provides a level death benefit for a level premium over the entire life of the individual. Most whole life policies actually “endow” and return the face amount at a given age. Whole life insurance provides the cheapest life insurance available for one reason. It is in force when death occurs. The percentage of claims paid on term policies is understandably quite low. The problem with whole life is that the premium required might cause a person to purchase less than an adequate amount of life insurance. A combination of whole life and term insurance can usually maximize coverage and minimize cost.
President, Lane Independent Agency, Southern California
Whole Life, also called Permanent Life, will last for the rest of your life, so long as you pay your premiums. Unlike Term Life, which lasts for a specific predetermined number of years, at a guaranteed rate. Whole life will not go up in price and will not go down in coverage amount. It accumulates cash value, from which you are able to borrow funds, for such things as college, home down payment, or even retirement, or whatever else you desire. With the accumulation in a quality policy, you can fund your retirement, as a substitute for a pension. Thank you. GARY LANE.
Insurance Adviser - Broker, SC Insurance Services, Oahu, Hawaii
This is a great question and I appreciate the opportunity to offer some answers! Whole Life Insurance has a lot of benefits! For one it is highly customizable in the way it may be funded. It can be set up to be funded in as little as 11 annual payments, or paid for monthly over the life of the insured up to age 100.
Whole Life policies have a Guaranteed cash accumulation feature where a guaranteed interest is paid into a cash value portion of the policy, which then becomes a liquid asset accessible at the will of the owner of the policy. The interest (as well as dividends in participating policies) is paid into the cash value Tax-FREE. And a policy may be "over-funded" up to about 300%, which of course will increase the tax-free interest growth rate.
In a participating policy where dividends are paid in, the dividends may be used to purchase additional insurance. This increases not only the death benefit without ever taking another medical exam or even answering questions, but also increases the dividends paid!
Whole life insurance does not expire. It remains in force (as long as the premiums are paid up) until the insured dies, the owner decides to surrender the policy (for the cash value), or the insured reaches the age of endowment. The age of endowment varies with the policy, but may be age 95, 99, 100, or now days may be as high as age 121. When that happens the entire value of the policy is handed over to the owner of the policy. Income tax free.
When paid, the death benefit passes to the beneficiary (ies) income tax free.
Another option available with Whole Life Insurance is the ability to use the cash value and then to take loans from the policy death benefit to supplement retirement income! This can be set up to be paid out monthly, quarterly or annually...and these payments are, again, Tax-free!
So to sum up, Whole Life Insurance does not expire regardless of the possible declining health of the insured and provides a death benefit to beneficiaries that is transferred tax-free.
Whole Life grows Cash Value, Tax-Free, which is a liquid asset that may be used for any purpose the owner wishes, and may be accessed without incurring a taxable event by means of a policy loan.
With participating policies the cash value can increase by means of guaranteed interest and dividends, which may be used to buy additional insurance with no medical requirements.
The premiums are set at the beginning of the policy and are guaranteed not to increase for any reason. And the entire premium may be paid in as little as 11 annual payments, spread out over the lifetime of the insured, or set up to be paid over a 15, 20 or 30 year period determined by the the owner of the policy.
And Whole Life Insurance may be used to supplement retirement income as a tax-free cash stream.
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Whole Life policies have a Guaranteed cash accumulation feature where a guaranteed interest is paid into a cash value portion of the policy, which then becomes a liquid asset accessible at the will of the owner of the policy. The interest (as well as dividends in participating policies) is paid into the cash value Tax-FREE. And a policy may be "over-funded" up to about 300%, which of course will increase the tax-free interest growth rate.
In a participating policy where dividends are paid in, the dividends may be used to purchase additional insurance. This increases not only the death benefit without ever taking another medical exam or even answering questions, but also increases the dividends paid!
Whole life insurance does not expire. It remains in force (as long as the premiums are paid up) until the insured dies, the owner decides to surrender the policy (for the cash value), or the insured reaches the age of endowment. The age of endowment varies with the policy, but may be age 95, 99, 100, or now days may be as high as age 121. When that happens the entire value of the policy is handed over to the owner of the policy. Income tax free.
When paid, the death benefit passes to the beneficiary (ies) income tax free.
Another option available with Whole Life Insurance is the ability to use the cash value and then to take loans from the policy death benefit to supplement retirement income! This can be set up to be paid out monthly, quarterly or annually...and these payments are, again, Tax-free!
So to sum up, Whole Life Insurance does not expire regardless of the possible declining health of the insured and provides a death benefit to beneficiaries that is transferred tax-free.
Whole Life grows Cash Value, Tax-Free, which is a liquid asset that may be used for any purpose the owner wishes, and may be accessed without incurring a taxable event by means of a policy loan.
With participating policies the cash value can increase by means of guaranteed interest and dividends, which may be used to buy additional insurance with no medical requirements.
The premiums are set at the beginning of the policy and are guaranteed not to increase for any reason. And the entire premium may be paid in as little as 11 annual payments, spread out over the lifetime of the insured, or set up to be paid over a 15, 20 or 30 year period determined by the the owner of the policy.
And Whole Life Insurance may be used to supplement retirement income as a tax-free cash stream.