Whole Life Insurance Offers Many Benefits
If you are looking for life insurance that provides protection for your loved ones as well as return on your investment, then whole life insurance is the way to go. There are many benefits to choosing whole life insurance over other types.
There are basically two categories of life insurance: Term Life Insurance
and cash value life insurance, like whole life insurance and Universal Life Insurance
. Term life insurance is the more affordable life insurance but also offers fewer benefits. Whole life insurance is slightly more expensive, but offers added benefits not available with term life insurance.
Whole life insurance covers you for your entire life. The premiums and death benefit generally stay the same throughout the length of the policy. One of the best benefits of this life insurance is that it builds cash value. This means you earn a return on the portion of your premiums that the insurance company invests. Also, with whole life insurance the cash value is tax-deferred, so you don't pay any taxes on it until you withdraw it and you can borrow money against that amount.
There are three types of whole life insurance: traditional, interest-sensitive, and single-premium. Traditional whole life insurance guarantees a minimum rate of return on the cash value portion of the policy.
Interest-sensitive whole life insurance gives a variable rate of return on the cash value portion, like with an adjustable rate mortgage. This type of life insurance offers more flexibility. You can increase the death benefit without significantly raising your premiums depending on the economy and the rate of return on the cash value portion of your policy.
Single-premium whole life insurance is perfect for individuals who want to pay one lump sum for their policy, rather than paying regular premiums. Like the other types of whole life insurance, this still earns cash value and has tax benefits.
There are many benefits to choosing whole life insurance. A portion of your premium with whole life insurance goes toward your cash value, which could pay off your entire policy in only a few years. Another benefit of this life insurance is that your premium stays the same unless you choose otherwise. For those worried about medical exams, with whole life insurance you have life long coverage with no further medical exams. And, of course, there are the tax benefits of these life insurance plans.
If you are looking for life insurance that offers many benefits and few drawbacks, then look no further than whole life insurance.
