Whole life insurance, also known as permanent life insurance, is a type of life insurance policy that provides coverage for the entirety of the policyholder’s life. This type of policy typically includes a savings component, known as the cash value, which builds up over time and can be borrowed against or used to pay premiums.
One of the main benefits of whole life insurance is that it provides a guaranteed death benefit, regardless of when the policyholder passes away. This can provide peace of mind for policyholders and their loved ones, as they know that their beneficiaries will receive a financial payout in the event of their death.
Another benefit of whole life insurance is the cash value component, which can be invested and grow over time by way of an annual dividend. This money can be used for a variety of purposes, such as supplementing retirement income or paying for university. Policyholders can also borrow against the cash value, although this will reduce the death benefit and may cause the policy to lapse if not repaid. One unique product is called Juvenille whole life insurance, a policy built especially for children. This policy can help protect them and provide guaranteed cash value for them to use in the future.
Whole life insurance policies also typically offer guaranteed premiums, which means that the policyholder’s premium will not increase over time. This can be a good option for those who want to ensure that they will be able to afford their premiums, even in the event of changes in their financial situation.
There are some downsides to whole life insurance as well. For one, it is generally more expensive than term life insurance, which provides coverage for a set period of time. Additionally, the cash value component of whole life insurance may not grow as quickly as other investments, making it less attractive for those who are looking for a high-growth investment.
Overall, whole life insurance can be a good option for those who want a guaranteed death benefit, the ability to borrow against their cash value, and a stable, long-term investment. However, it is important to weigh the pros and cons of this type of policy and consider other options before making a decision.
We’d be delighted to discuss the pro’s and con’s of whole life insurance with you, feel free to reach out with any questions!
