Do you want to get life insurance but can’t decide which to choose? If you want a permanent choice, we have the answer for you.
Whole life insurance coverage usually offers more guarantees. It puts together cash returns, insurance, and death benefit in a single product. All you need to do is continue paying the premiums.
Here are nine more benefits you can get from whole life insurance.
1. Fixed Premiums
Term-life and other permanent insurance policies go up after a while. With whole life insurance, premiums for whole life insurance stay the same each month.
Although each payment costs more, it’s more affordable if you want something long-term.
You’re most likely going to come across a company with fixed premiums. But you might still find companies that allow you to adjust your payments under certain conditions.
2. No Expiration
Whole life insurance literally lasts for the rest of your life because your death benefit doesn’t expire. So, you can expect to receive those benefits no matter how late you need them.
That’s the biggest difference between whole life and other insurance options. Usually, term-life policies only pay a death benefit within the window of time it covers.
And so, you won’t have to worry about time with whole life coverage.
3. Cash Value
Every time you pay a premium, a part goes toward your policy’s cash value. Those slowly add up until it becomes cash you can access anytime.
Note that the cash value is separate from the cost of your insurance. So, it’s like you’re keeping savings funds along with your policy. That’s a great benefit if you have trouble saving money in a regular account.
What makes it better is that it won’t go down or get taxed unless you or your beneficiaries use it. You could say your insurance doubles as an investment!
4. Guaranteed Death Benefit
Other types of life insurance offer death benefits based on your policy’s cash value and market investments. With term-life insurance, the company won’t pay the death benefit if you’re still living when the policy expires.
If you get permanent life coverage, your beneficiaries are sure to receive the benefit. The only condition is that you maintain your policy payments so it doesn’t lapse.
It also helps to note that your death benefit amount depends on the face value of your insurance minus withdrawals and unpaid policy loans.
5. Tax-Advantage Benefits
The sum you leave with your family is already tax-free. But with this policy, your cash value grows without getting taxed. It will feel a lot like your money is growing faster because it doesn’t get deductions.
These tax-free assets are easier for your beneficiaries to access even after you’re gone. It makes it a convenient source of funds for your family compared to property and the like.
6. Retirement Funding
Whole life insurance policies let you build your retirement income effectively, even if it’s not a direct retirement fund.
Note that it depends on how long you’ve had the insurance. The longer you’ve had the policy, the more you grow your cash value.
If your fund increases enough, you can put part of that money towards your retirement fund. A quick tip is to move it to your retirement savings once it’s necessary to maximize the tax advantage.
7. Possible Dividends
When you buy whole life insurance from multiple insurance companies, you can get dividend payments each year. It refers to the returns you receive based on your paid premiums.
Here are a few ways you can use these dividends:
- Cash withdrawal
- Purchase added insurance
- Pay due insurance payments
Usually, the dividends you earn are also tax-free. So, when you put it towards a different payment, it will likely transfer as is.
8. Borrowing Ability
According to statistics, around 70% of people who buy whole life insurance policies are millennials and older generations. One of the common reasons is to gain income replacement.
The point of whole life insurance is to get long-term financial protection and guarantees, but it also helps you build your funds.
Some people see whole-life policies more as an investment rather than insurance. That’s because it comes with tax advantages so you could grow your money without worrying about deductions!
Your policy also makes it more accessible because you can borrow against the value while you’re living, whichever the reason. But remember that failing to pay back your loan can impact your policies and benefits.
9. Lifelong Protection and Peace
There are many types of life insurance, but whole life coverage protects and benefits you lifelong. You only need to worry about paying the premiums!
That means the policy stays even if you experience a change in your health or lifestyle. Some insurance companies end your policy when you reach a certain age or experience specific health issues before the policy ends.
Whole life insurance will continue under those conditions. So, it can relieve you of future worries because you know you and your family will stay covered.
If you want to know more about how life insurance policies work, get in touch with health insurance agents to guide you.
Consider Whole Life Insurance Coverage for More Benefits
It’s best to look into whole life insurance coverage before buying the insurance. That way, you know what you’re getting into and how to continue benefiting from it.
While whole life insurance offers several benefits, it’s not always ideal for some people. So, be sure to consult an expert before making a final decision.
If you want to learn more, check out the rest in our blog!
