Long Term Coverage
For those looking for a more long term life insurance plan, whole life insurance is a viable option. It provides lifetime protection for the insured and beneficiaries and is the ultimate security for those seeking financial assurance for beneficiaries in the event of death. While the initial premium is higher than that of a Term Life plan, premiums remain level while the plan is active and do not increase with age — for some, this can prove to be a more economical option than renewing a term-life plan.
Guaranteed Cash Value
When insured under a Whole Life plan, a portion of the premiums paid accumulate a cash value throughout the life of the policy — this is money that can be borrowed against to help cover any sudden, major expenses. Any money borrowed from the plan is considered a loan, so interest must be paid against it. However, this charge is usually lower than that of other loans and the money is accumulated on a tax deferred basis, meaning the amount owed can be deducted from the beneficiary’s final payout. A payout is guaranteed as long as premiums are paid while the policy is in place. However, if the policy owner decides to terminate their policy, they are still entitled to the policy’s cash surrender value (i.e: investments), but not the face amount (the overall value of the policy). This plan generally requires a health examination in order to qualify, but it can also be purchased without prior examination, at a higher cost.
When considering Whole Life insurance, it is important to consider factors such as:
- The need for permanent coverage for you and your family
- The financial capability to pay higher, fixed premiums in exchange for long term coverage
- The need for establishing/improving retirement plans and real estate planning
If ultimate financial security is what you seek, then Whole Life insurance may be the right fit for you and your family.
