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Life Insurance

How To Buy Whole Life Insurance For A Lifetime Of Safety

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Whole life insurance, also known as “whole of life” insurance or “permanent life” insurance, is a life coverage plan guaranteed to stay in force for an entire lifetime, paid for during the whole life of the insured, or at the maturity date if required. Often, whole life insurance policies are purchased by individuals to provide additional protection against loss of income due to retirement and to ensure savings for future living expenses. Many complete life insurance plans allow the policyholder to borrow against the policy’s cash value. With these additional features, whole¬†Life Insurance¬†can be an excellent financial investment.

Whole life insurance policies pay a fixed premium, regardless of the insured’s age or the age at the time of the purchase. Premiums are usually fixed for the lifetime of the policy. Policyholders are not allowed to invest in any type of mutual fund, stocks, or bonds with respect to the premium. However, they may invest in money market funds or in government bonds with the federal government if the premiums are deposited into an individual savings account, according to the laws on payouts of dividends. Policyholders may also borrow against the policy’s cash value to pay for medical bills, estate taxes, or loan repayments. If the policyholder is unable to make a payment, the policy expires and no payment is received.

In addition to the premiums, policyholders are required to pay a death benefit, which is non-taxable, just for the named beneficiary. The death benefit is not affected by earnings and investment, though the amount is still subject to tax. In addition, the premium and death benefit remains unchanged if the insured dies during the contract period or within the defined benefit period, which is three years from the date of purchase. The premium stays the same during this period, while the value of the savings component increases and the face amount and/or premium decreases. Premiums may be raised at any time by the policyholder, though in most states the premium cannot be increased for more than ten percent per year.

The insured pays tax on the death benefit and the value of the insurance minus the premiums and/or savings. The amount of coverage is dependent on the value of the savings component, which varies from plan to plan. For instance, some Whole Life Insurance policies provide coverage for the policyholder’s spouse and children, and others provide coverage for the entire family, the insured and/or the beneficiary. Some Whole Life Insurance policies provide coverage even if the insured is not living, while others offer a “Terminal” benefit, which guarantees a payout should the insured die within the designated period. These plans generally cost more than other types of Whole Life Insurance plans.

Some Whole Life Insurance Company policies provide for specific types of beneficiaries. For example, the “Special Needs” beneficiaries or those with certain medical conditions such as diabetes or heart disease, may be able to designate a specific beneficiary. Similarly, in the case of Terminal or “RR” plans, the proceeds of the death benefit are designated to designated beneficiaries. The proceeds of the policy must be accessible to these designated beneficiaries, and usually this means that the designated beneficiary will need to be a legal resident of the U.S., or qualify for a U.S. Social Security number, in order to access the funds. This helps to ensure that the designated beneficiary receives the payout should they pass away.

While premiums make up the largest portion of the premium, they are far from the only consideration when selecting a whole life insurance company. In addition to regular premium payments, the insurance company will also assess a risk weight, which considers factors such as the possibility of the policyholder dying during the designated period, the amount of time the policy owner can expect to live in the policy, their likelihood of failing to make premium payments, and their likelihood of getting cash settlements, should they die within the designated period. Whole life insurance policies also assume that the insured will continue to have the same lifestyle for the remainder of their lives, and most policies also include additional features designed to provide financial protection in the event of a disability or terminal illness.

As opposed to whole life insurance policies, universal life insurance policies are generally less expensive and more flexible, providing a mix of flexibility and safety. The most well-known example of a universal life insurance policy is the whole life insurance policy. With a whole life insurance policy, premium payments remain consistent for the lifetime of the policy. The cash value accumulation portion of the whole life insurance policy, however, is made available to beneficiaries only upon the policy holder’s death, but the policyholders can take advantage of the accumulated cash value in any way they see fit, including paying premiums, making withdrawals, and borrowing from the policy.

Universal life policies also provide lifetime coverage but are less expensive than whole life insurance policies. They provide lifelong coverage options in addition to flexibility. Unlike whole life insurance policies, universal life policies may be taken out for as little as a few years and must be repaid only if you die during the introductory period. However, because they do not require annual premiums and are much less expensive than whole life policies, universal life policies are ideal for younger people who might not otherwise be able to afford a permanent life insurance policy. They are particularly useful for young couples, as they will provide the equivalent of a permanent life insurance coverage while a young couple’s income is being protected by a permanent life insurance policy.