What Is Whole Life Insurance?



Are you wondering what is whole life insurance?

Are you wondering if this is the right type of insurance for your particular lifestyle needs?

Whole life insurance is a long-term policy. (Unlike term insurance.)

Some refer to it as permanent life insurance coverage. This is because it will continue to cover you as long as you live.

Which makes it for many people, an ideal choice for investment, with the accumulation of cash value and the level premium payments available.

The Benefits;

There are several key benefits to using this type of insurance over other forms of life insurance. Consider the following commonly found features.

  • The premiums of whole life insurance are usually level (or remain the same) throughout your lifetime.This means that if you are young, purchasing whole life insurance now will ensure that in the long term, your payments will be less expensive than if you wait.
  • Most are payable for life, however often at some point during the life of the policy the cash value is great enough that if you choose it will cover the cost of the premiums each year, and you no longer have to pay anything into the plan.
  • Some whole life insurance policies earn dividends. For example, if the actual life insurance costs paid by the insurance company are less than what was paid through premium payments, the life insurance company may return some of those funds to you in the form of a dividend. The insurance company cannot give you a guarantee however that you will receive them.
  • The cash values of these policies however, have guarantees. Most whole life insurance policies will accumulate value. Term life insurance does not accumulate any cash value. If you surrender your whole life policy, the value is available to you.
  • You may also borrow against your policy if you need to.

As you can see, there are key benefits to using whole life insurance coverage throughout your life. Unlike a traditional insurance policy where premiums are made and nothing is earned, with whole life, you get something back.

What Is Whole Life Insurance Worth?

The value of your whole life insurance policy has a basis on the amount of coverage you obtain at the time of starting your policy. You may adjust this value throughout the lifetime of your policy, in most cases.

When asking, what is whole life insurance, consider your own personal circumstances.

This type of life insurance could;

  • protect your family from financial devastation down the road.
  • It may provide you with the funds to supplement your retirement income.
  • It could be part of your estate plan.

What is whole life insurance to you? The answer to that question may be quite simple. It is a form of long-term, permanent financial protection.





See a diagram of how Whole Life Insurance works

Shopping for Whole Life Tips

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