Benefits of Whole Life Insurance

While term and universal life insurance have lower rates than whole life insurance, these types of policies lack many of the benefits of whole life insurance. Term life insurance has no cash value and payment of the death benefit is only guaranteed if the insured person dies within the term of the policy. Universal life insurance has a cash value, but the investments used to grow the cash value are riskier than the guaranteed interest of whole life insurance and universal life insurance rates are subject to increases over time.

The advantages of whole life insurance are that rates and coverage are fixed for a lifetime, the death benefit is guaranteed to be paid out, and whole life insurance as an investment is safe. To learn more about the benefits of whole life insurance, get online life insurance quotes to compare policies offered by different insurance companies.

Guaranteed Fixed Rates and Death Benefit

Whole life insurance is a permanent life insurance policy that cannot be canceled by the insurance company unless the insured person fails to pay the premiums. Payment of the death benefit for whole life insurance is guaranteed since the policy does not expire. Whole life insurance rates are based on the age and health of the policyholder at the time the policy is purchased and his or her average life expectancy. To verify your health and medical conditions stated in your application, life insurance companies require a medical exam before issuing a policy.

However, once you buy whole life insurance, rates never increase even if the insured person lives to age 90 or more and the death benefit remains fixed over the life of the policy. Over a lifetime, whole life insurance quotes are affordable and cheap when compared to term life insurance, which must be renewed multiple times, usually at higher rates.

Whole Life Insurance Cash Value

One of the benefits of whole life insurance that sets it apart from term life policies is that part of your premium payments are diverted into a savings account feature or equity account, also known as the policy?s cash value. The insurer pays a guaranteed rate of interest on the funds in the account and the cash value grows in value for as long as the insured person maintains the policy. The policy?s equity can be redeemed by the policyholder at any time, or the cash value can be used to secure low interest loans from the insurance company. Whole life insurance as an investment is virtually risk free and can provide the savings to reach financial goals, like a nest egg for retirement.

Tax Benefits of Whole Life Insurance

The returns on the cash value in an equity account are tax deferred until they are withdrawn from the policy. If the funds are used to secure a loan, no income tax is due since loans are not considered income. The loans do not have to be repaid, but the outstanding amount will be deducted from the death benefit when the insured person dies. The whole life insurance death benefit is tax exempt, making life insurance a useful tool for estate planning.

Cost of Whole Life Insurance

Because term life insurance is rated on the insured person?s age and health over the term of the policy, term life insurance rates for younger people will be lower than whole life insurance rates. A long term policy is usually between 20 and 30 years, while whole life insurance quotes are based on total life expectancy. As policyholders age, the cost of renewal term life policies are substantially higher and some financial experts believe that the cost of term and whole life insurance is actually about the same over a normal lifespan.

To learn more about the cost of whole life insurance, consumers can get free, instant life insurance quotes to compare policies, coverage, and life insurance rates, determining which type of insurance is best and affordable for their needs.

Whole Life Insurance Quotes

The benefits of whole life insurance include a permanent policy that cannot be canceled, fixed rates and death benefits for life, and repayment of part of the premiums in the form of the cash value. Whole life insurance?s cash value offers tax advantages for both financial and estate planning and can help policyholders reach long term goals. With a life time cost that is close to the same as term life insurance, which offers none of these benefits, it makes sense for consumers who can afford whole life insurance to choose a policy that offers them the best value for their premiums.

To see if whole life insurance is the right choice for you and your family, get whole life insurance quotes online and compare the different types of life insurance, such whole vs. term life insurance. Enter your zip code to begin a life insurance quote now and find the best and cheap life insurance available in the U.S.

Source: http://www.wholelifeinsurance123.com/benefits-of-whole-life-insurance/

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