Whole Life Insurance (WL)
A whole life insurance policy provides life-long protection with guaranteed death benefits, fixed premiums, and builds up cash value. This policy remains in place for the whole life of the insured individual unless the policy lapses or is cancelled. Premiums are paid every year for the life of the policy to keep it in force. If you do not have a long-term need for life insurance, this could be the wrong type of insurance for you.
Whole Life Insurance includes:
- Guaranteed minimum death benefit (face amount) as long as you continue to pay premiums
- Premiums are level and invested in the general account of the insurance company
- Cash value earnings grow tax-deferred
- Dividends, if declared and not guaranteed, may be used to purchase additional insurance coverage or increase the cash value or reduce your premium payment
- Ability to select a payment schedule that fits your needs (annual, semi-annual, quarterly, or monthly)
The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable by having the policy approved. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications.
Guarantees are based on the claims paying ability of the issuing company.