Whole life insurance is one of the most common types of insurance. It is also called "permanent" or "straight" life insurance. This policy covers a person for their whole life. This is very popular because it can protect the insured financially, build cash value, and pay dividends to the insured. In other words, you can think of it as an investment you make to secure your future and save money that will help you when you need it.
Buying a whole-life policy...
Whole life insurance is one of the most common types of insurance. It is also called "permanent" or "straight" life insurance. This policy covers a person for their whole life. This is very popular because it can protect the insured financially, build cash value, and pay dividends to the insured. In other words, you can think of it as an investment you make to secure your future and save money that will help you when you need it.
Getting a policy that covers your whole life has a lot of benefits. Here are just a few of them.
- The Death Benefit is the first benefit.
The death benefit you get from a whole life insurance policy never goes down. Also, there are no federal income taxes due when someone dies. And, if you want, you can take the death benefit as a monthly payment instead of a lump sum.
- The level of the premium stays the same.
The premium you pay for whole life insurance stays the same, while the premium you pay for term life insurance goes up every time you renew it. There is no growth. But if you use dividends, you can reduce the amount of the premiums you agreed to pay.
- Another good thing about whole life insurance is that it has "cash value."
Unlike other types of life insurance, whole life insurance builds up cash reserves that can be used. This grows as people pay premiums and money builds up without being taxed. If you decide to give up the policy, you get the cash value.
- You can get dividends from a whole-life insurance policy.
If you own a participating whole life insurance policy, you may be able to get dividends. You get these dividends in cash, which you can then use to buy paid-up additions to reduce your premiums or keep in your policy to earn interest.
There are a lot of good reasons to get a whole life insurance policy. If you're not sure, you should talk to a professional before getting a policy.
