The essence of whole life insurance is to be covered throughout your lifetime. It is not meant for a specific period of time, like it is with the term life insurance. In the case of whole life, the premiums and particular benefits will not be affected by anything. This kind of insurance has another benefit of building for the insured cash value.
The cash value is basically part of your premiums invested by the insurance company. The advantage with the cash value is that it is not taxed until withdrawal time. At the same time, you have the liberty to borrow from it.
With whole life insurance, the insured person has options to choose from. For instance, he can decide to take a traditional type, an interest-sensitive option or a single premium one. With the traditional type, you have a guaranty of a fixed minimum return rate on the cash value.
The interest sensitive is such that there is a varying rate on the cash value. This is more flexible in terms of policy as compared to the other types. The single premium type works for those who have large money and wish to purchase an upfront cover. All these options still offer cash value benefits to the insured.
Benefits of whole life insurance
Cash value is the main benefit that the insured will gain from this form of insurance policy. This is usually drawn from a port of your premiums every time you make payment. You are also allowed to borrow from the cash value after some times. This is an important benefit that you never find with other types of insurance.
Moreover, the premium charge when dealing with whole life never changes. It remains constant throughout. Unless you change it, you will experience peace of mind throughout your life. The tax savings also make whole life cover a good option for many people.
If you want to get a quote on your life insurance policy you can easily get life insurance quotes without phone call online.
Is this type of insurance a good option for me?
Even with the lucrative ideas, it is still important to ask yourself if you should apply for this kind of policy. In simple term, life insurance is vital for all people as long as you have dependants whom you may leave behind after you die. Because of different life insurance options, you must consider whether you want whole life or term life insurance cover. It is believed that the longer term nature of whole life insurance make it a great choice for majority of people.
The rate of return on whole life type of insurance is usually quite low as compared to other types, especially because of the tax factors included. Everyone should understand that life insurance itself should not be used in isolation of other investments options.
It is not the best investment tool to rely on. What one needs to look at is the idea of security or protection rather than the rate of return. However, for all who wish to apply for life insurance, whole life will be the best option to consider. The tax benefits and the cash value should be enough reason to choose it.