Whole Life Insurance (Permanent)

Whole Life Insurance is a permanent life insurance policy guaranteed to remain in force for the life of the insured as long as premiums are paid. When you first apply for coverage, you are agreeing to a contract in which the insurance company promises to pay your beneficiary (person that will receive the death benefit) the amount of money that the policy has been agreed to, when you sadly pass away. 

Your premium will be calculated based on your age, gender, health, and if you participate in any hazardous hobbies. The insurance policy will stay in effect for as long as you continuously pay your monthly premium. The monthly payment (premiums) will remain the same in spite changes in your age and health.

Whole life insurance is different from term life insurance, which only provides coverage for a certain number of years, rather than a lifetime, and only pays out a death benefit. Term life does not have a cash savings component.

Whole life insurance guarantees payment of a death benefit to the beneficiary (s) in exchange for level, regularly due premium payments. The policy includes a savings portion, called the “cash value,” alongside the death benefit. In the savings component, interest may accumulate on a tax-deferred basis. Growing cash value is an essential component of whole life insurance.

To build cash value, a policyholder can send more additional payments than the scheduled premium (also known as paid-up additions). Policy dividends can also be reinvested into the cash value and earn interest. 

The cash value offers a living benefit to the policyholder. Over time, the dividends and interest earned on the policy's cash value will often provide a positive return to investors, growing larger than the total amount of premiums paid into the policy. In essence, it serves as a source of equity.

To access cash reserves, the policyholder requests a withdrawal of funds or a loan. Interest is charged on loans with rates varying per Insurance Company. Furthermore, the owner may withdraw funds tax-free to the value of total premiums paid. Any unpaid loans will reduce the death benefit by the amount taken out. Any unpaid policy loans or withdrawals will reduce the cash value in the policy. 

Permanent (Whole) Life insurance is more costly than Term insurance including Return of Premium;(Term insurance) but less expensive than an Indexed Universal Life Insurance (IUL) and depending the amount of coverage being requested, and its features.

Additionally, many Insurance carriers, but not all, now offer policies with Living Benefits.    

Ideal age of Policy holders: 1-85 years old.