Are you trying to decide between whole life insurance and term life insurance? Both insurance policies pay a specific benefit to your survivors upon your death. However, a whole life insurance policy is permanent, while a term policy only provides coverage for a set period. There’s a whole host of benefits to purchasing a whole life insurance policy:
Although whole life insurance is more expensive than term life insurance, as long as you continue to pay your premiums, your coverage will never expire or drop in value.
Locked Premium Rate
Unlike term policies, you can rest assured that your premium (the amount you pay for your policy per month) will never increase or decrease unless you decide to change the coverage amount. Your premium rate is based on your age at the time you begin the policy.
Guaranteed Death Benefit
Provided premiums are paid, whole life insurance policy entitles you to a guaranteed death benefit, which remains at the same level throughout the life of the policy.
Cash Value Growth
A portion of your premiums contributes towards the policy’s cash value, which acts as a tax-deferred savings account that can be borrowed against to finance short-term goals, such as a child’s college fees, or dipped into in case of an emergency.
The cash value of a whole life insurance policy grows without incurring tax, making it an efficient tax-deferred savings vehicle. The cash value component of a whole life insurance policy grows at a fixed rate of income and will never decrease.
Pay for Estate Taxes
Whole life insurance can be used by high net worth individuals to cover estate taxes in the event of their death. It can also be a helpful planning tool for small business when organizing the heirs and balance inheritance.
Financial Protection Against the Uncertainties of Life
You can’t predict the future, but you can be prepared for whatever happens. If you pass away prematurely, your coverage amount could help your loved ones continue to live in your family home, keep the car, attend college, pay off the credit card and even help with costly funeral expenses.
We’re here to help make life insurance more accessible and more affordable for you and your family. If you have any questions regarding whole or term life insurance, give our friendly team a call today.