Whole Life Insurance
Whole life insurance is a type of permanent life insurance that provides coverage for your entire life. It’s one of the most popular types of permanent life insurance you can buy, and it can be used as part of a broader investment strategy. This type of coverage provides a cash value and the ability to borrow against it during the life of the policy. Other benefits include certain medical supplements that are used to financially relieve any medical bills.
Benefits of whole life:
Whole life provides a death benefit at the time of death and cash value that can be used later in life to help pay for tuition, medical expenses, and other unforeseen costs. As you are paying your premiums, a portion goes towards the life insurance and the other goes towards the cash accumulation. This cash accumulation can be closely related to a savings account that grows over time. You are able to borrow against the cash value or withdraw which can be subjected to fees.
What happens to the death benefit if any cash was withdrawn or borrowed?
Your beneficiaries will receive the death benefit minus any money withdrawn or borrowed.
When can I start withdrawing or borrowing from the cash account?
As soon as you see cash accumulating in the account, you may withdraw or borrow the money.
Are withdrawals subject to tax?
When you withdraw more than you put in, the excess amount is subject to income tax.
Life insurance riders are additions to the policy that let you select extra features so you can tailor the coverage to your particular needs. Some riders come included with your insurance policy, while others can be purchased separately or may incur a price when used. Some life insurance providers offer "living benefits riders" on their policies. Benefits from this kind of insurance rider can be valuable to you while you're still alive.
Living benefit riders:
Chronic Illness Rider
Critical Illness Rider
Terminal Illness Rider
Other Riders and Options:
Disability Waiver of Premium Rider
Income Protection Option
Guaranteed Insurability Benefit Rider
Term Insurance Rider
Children's Benefit Rider
Accidental Death Benefit Rider
Frequently Asked Questions:
Who needs whole life insurance?
Whole life insurance can be for those who have a family or individuals who can benefit from a tax-free retirement or savings account. Because of the added riders, you can plan further for unexpected events.
Does everyone qualify for whole life insurance?
Some whole life insurance policies, depending on the insurance carrier, may require a medical exam. The healthier you are, the more qualified you are to be approved for the whole life policy.
Is a whole life better than a term life policy?
The answer is dependent on everyone's unique circumstances. You would need to speak to an insurance advisor to see which type of life insurance policy is best for your needs and budget.
Which rider is the best?
Each rider is different and may supplement a life event that may happen in the future. To review specific detaisl on what each rider provides, visit our article: Life Insurance Riders.