Whole Life Insurance - Everything you need to know

Get a FREE Life Insurance Quote Today!

Imagine a life insurance policy that provides a death benefit for your beneficiaries, builds cash value, generates policy dividends, defers taxes, and provides potential tax free cash distributions via policy loans.  It's called whole life insurance and maybe it's right for you.

Buy term and invest the difference...

If you have ever considered life insurance, no doubt you have heard someone say "buy term and invest the difference"

But did you really invest the difference?

If you did, great.....but how are those investments doing?  What if you didn't invest the difference?

Does whole life insurance really offer all of the above benefits?

Let's take a look and find out.

What is whole life insurance?

Whole life insurance is a permanent life insurance policy that provides a death benefit, builds cash value on a tax deferred basis, allows you to borrow from the life insurance policy, and some whole life insurance policies may pay dividends from time to time.

Whole life insurance death benefit - The death benefit on a whole life insurance policy tends to be a level death benefit policy.  With some whole life insurance policies that pay dividends, you may be able to select an option that will use your dividends to buy additional life insurance for you.  This is called Paid Up Additions.

Are there different types of whole life insurance policies?

Yes there are many types of whole life insurance policies such as:

Participating whole life insurance - Participating whole life insurance policies may pay dividends...or they may not as dividends are never guaranteed. 

Non-participating whole life insurance - Does not pay dividends

Limited pay whole life insurance - is a whole life insurance policy where you will pay premiums for a limited period of time with no further premium requirements.  Compare this to a traditional whole life insurance policy where you pay premiums every year.

Single premium whole life insurance - is a whole life insurance policy where you pay a single premium with no further premiums.

Get a FREE Life Insurance Quote Today! 

Whole life insurance cash values - Over the course of time, a whole life insurance policy will build cash values.  If your whole life insurance policy builds enough cash value, you may be able to borrow cash from the policy via policy loans. 

It is important to note that your beneficiaries DO NOT receive the death benefit and the cash value from your life insurance policy.  If you die, your beneficiaries would only receive the death benefit, not the cash value.  Typically the death benefit on a whole life insurance policy is reduced by the amount of any outstanding policy loans you have.

Cash values grow tax deferred within a whole life insurance policy and you may be able to access cash values at a later time via policy loans.

If you surrender your life insurance policy, you would receive the cash surrender value of the life insurance policy if there is one.

What is a whole life insurance dividend?  A whole life insurance policy dividend is a return of your premium...basically you paid too much and the life insurance company is returning your excess premium to you in the form of a dividend.  Since a dividend is typically considered to be a return of your money, it does not create a taxable event...in most cases.

Life insurance dividends can be paid back to you in cash, dividends can be used to reduce your life insurance premiums, or dividends can be used to buy Paid Up Additions on your whole life insurance policy.

Dividend Tip - When considering a participating whole life insurance with dividends, look at the history of that life insurance company's dividend performance...are the illustrated dividends in line with past performance?

Get a FREE Life Insurance Quote Today!

Whole Life Insurance - Things to Consider

Whole life insurance premiums tend to be expensive.  It is important to get the right amount of life insurance for your situation.

Can you afford a whole life insurance premium year after year?

If the answer is yes, whole life insurance may be a great option for you.

If the answer is no, maybe you need to look at other options such as term life insurance or universal life insurance.

Whole Life Insurance Tip - If whole life insurance appeals to you, it may make sense to buy some whole life and some term life insurance to get the right amount of life insurance at a reasonable price. 

If you consider this option, look for term life insurance with a good conversion option.  This will allow you to convert your term life insurance into whole life insurance at a later time if you like.

If you have health issues, LifeInsuranceAdvisors is the #1 source for impaired risk life insurance underwriting.  LifeInsuranceAdvisors will help you find the right life insurance company based on your specific health history.

Get a FREE Life Insurance Quote Today! 

At LifeInsuranceAdvisors there is Never any pressure or obligation with our life insurance service.  We'll give you the information you need to make an informed decision about your life insurance. 

Get a FREE Life Insurance Quote Today!

OR

Call us today at Toll Free (800) 909-2040

Thank you.

 

 

LifeInsuranceAdvisors.com does not provide accounting or tax advice.  Please consult your trusted tax advisor for your specific situation.

If You have health issues, it is important that we know about those health issues in order to provide you with the most accurate term life insurance quotes possible.  You will find more information here about health issues such as:

Alcohol Related, Angioplasty, Asthma, Bipolar, Blood Pressure, Build, Cancer, Crohn's, Depression, Diabetes, Family History, Heart Disease, Hepatitis, Liver Enzymes, Melanoma, Sleep Apnea, Tobacco Use, Ulcerative Colitis, and many more Impaired Risk Life Insurance topics.

Life Insurance - Home | Life Insurance Services | Testimonials | Free Online Quotes | Quick Quote Form | Free Needs Analysis Calculator | Companies | Life Insurance Definitions | FAQ | About Us | Contact Us | Links | Site Map | Privacy Policies