Whole Life Insurance is a type of Permanent Life Insurance that provides a guaranteed payout at the time of death as long as all premiums are paid. Other benefits of whole life are that they carry a cash value, have fixed premiums that do not change over time and expense charges don’t reduce the cash value of the policy.
The primary disadvantage of whole life insurance is that you are not able to change the amount of the premium paid periodically. In other words, once you pick a policy, you are locked into paying the same premium for life. Whole Life policies many be amended to provide more coverage with higher premiums but are very rarely changed to reduce coverage.
Whole life insurance premiums are also much higher than term insurance at the beginning of a policy, but they tend to equal out if policies remain in effect until the average life expectancy.
You can also borrow from whole life insurance against any cash values that your policy has generated. These loans can either be paid back to the policy or they can reduce the payout at the time of death.
The seven main types of whole life insurance are:
- Non-Participating
- Participating
- Indeterminate Premium
- Economic
- Limited Pay
- Single Premium
- Interest Sensitive
If you would like to learn more about the different types of whole life insurance and how it can protect your family, please feel free to contact me to set up an appointment.
