Whole life insurance is a peace-of-mind measure that’s designed to protect an individual throughout his or her entire lifetime.

While there are dozens of varieties of whole life policies, the shared factor between all of them is that whole life policies offer permanent insurance that provides guaranteed premiums, death benefits, and cash value.

Read on to learn more.

Why Purchase Whole Life Insurance?

People typically purchase whole life insurance for a variety of reasons, including the following:

• Protection for life
• Payments that never change
• The ability to put additional money into the policy in a way that’s favorable to taxes
• To build cash value that is usable during the policyholder’s lifetime

These things, combined with its many other values, make whole life insurance appealing to many individuals.

The Guarantees of Whole Life Insurance

One of the biggest appeals of whole life insurance is the benefits it offers. These benefits include the following:

• Death benefits: Death benefits are guaranteed on a whole life plan. With a whole life policy, beneficiaries will receive, at the very least, the face value of the policy upon the death of the insured. This is true as long as there are not unresolved policy loans on the account and the policy premiums have been paid in a timely fashion.
• Cash Value: With a whole life insurance policy, the cash value of the policy grows on a tax-deferred basis until it matches the policy’s face value. This cash is available through withdrawal and loans during the insured’s lifetime.
• Guaranteed premiums: One of the most attractive aspects of a whole life insurance plan is the fact that the premiums the insured individual pays will stay the same throughout the life of the plan. This is true regardless of the insured’s age and health. 

The 3 Types of Whole Life Insurance

When an individual purchases whole life insurance, they have a choice between three different policy types:

• Universal. Universal life insurance is the most common type of life insurance. In these policies, a portion of the premium paid by the insured goes toward a death benefit while another portion goes toward savings.
• Variable Universal. Variable universal whole life insurance is a mixture between universal and variable life insurance. In most cases, it offers guaranteed death benefits, although the piece of the premium that doesn’t go toward the death benefit can be invested according to the purchaser’s preferences.
• Variable Life. Variable life whole life policies are more investment-based than many other types of insurance. In these policies, most of the premium amount goes into an investment. Many professionals consider these policies somewhat riskier than other options because death benefits can be directly affected by investment returns.

Final Expense or Burial Insurance is a form of whole life insurance that doesn’t have any confusing, investment aspect to it. These are smaller policies, usually from $5,ooo to $50,000 and they all provide guaranteed premiums, death benefits, and cash value.

Conclusion

For people who want guaranteed benefits and whole life protection, a whole life policy can be a fantastic option. For people who want these policies, though, it’s imperative to shop around and consult with an experienced insurance professional beforehand.

For more information about whole life plans or to find a policy that works for you, contact Lifelong Insurance, LLC today.