Whole Life Insurance Information

By Compuquotes Team on March 26th, 2008

A whole life insurance policy insures you for your entire life, but the main benefit that you get with this policy is the cash value you can accumulate. A whole life insurance policy offers your beneficiary a one lump sum in the event of your death, but goes even further and can provide the policy holder with financial assistance.

Check out your whole life insurance rate. If you do any research you will note that whole life insurance rates tend to be much more expensive that a term life insurance rate, which could be why more people go with term life insurance policies. There is a reason as to why whole life policies are more expensive, because they have more benefits and terms that a term life insurance policy can't offer such as the cash value you will accumulate.

You should realize that cash value is not the same as face value, which is the total amount of money the beneficiary receives in the event of the policy holder's death. Cash value is the total amount of money that the policy holder has access to while still alive. You may wonder why the policy holder would want to access the money in a whole life insurance policy and there are actually a few different reasons as to why they would want to.

A common reason for a whole life policy holder to access their money is to take out a loan against the amount to pay for an emergency bill, and others cash it in right before they die to have some fun with the savings. Another common use of the savings is to use the amount to pay toward the whole life insurance rate.

Whole life insurance policies have several more benefits such as the ability to withdraw money from your account at any given moment. The cash value that you accumulate is also tax deferred. Your whole life insurance policy will always have a fixed premium which makes it easier to know your payments and know they will never increase. As long as you pay every payment on time your rates will stay the same your entire life.

The only downside I have found with whole life insurance policies is that you don't have any flexibility when it comes to your premiums, nor your face amount. Without this flexibility you aren't allowed to transfer money from one account to another. Whole life insurance policies also don't invest in separate accounts such as stocks, money markets, or bond funds.

There are also many people who go with whole life insurance policies to help them with their estate planning. When you set up an insurance trust with the help of a whole life insurance policy, you can design it so the proceeds of your insurance policy are used to pay your estate taxes. All of your estate taxes would be due, and otherwise left to be paid by your surviving family. It is better to protect your family then to leave them with your financial burdens when they are in the grieving process.

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