What Is Whole Life Insurance?

Find Out What Whole Life Insurance Is All About

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What is whole life insurance? Whole life insurance is a life insurance policy that provides protection for the rest of your life. It doesn't matter how long you live, you will always have the protection. This, of course, is as long as you keep paying the premiums.

• Whole life insurance can provide a lump sum or income for your family in the event of your death.
• A whole life insurance policy can be used to pay off a mortgage upon the death of the homeowner. The cash values and dividends of a whole life policy can be used to pay off part or all of the mortgage balance years down the line, after it accumulates a substantial cash value. Dividends are not guaranteed. My observation is, however, that the more efficiently companies tend to pay dividends each year.
• You can use a whole life insurance policy to fund a business partnership's buy-sell agreement upon the death of one of the partners. It can also be used to fund such an agreement with a corporation.
• Whole life insurance can be used for key man insurance.
• The cash values of whole life insurance can be used to top up retirement income when you get to that age.
• This policy can be used to pay Federal Estate Taxed which become due at the death of the insured.

What is whole life insurance? How does this policy work? Whole life insurance maintains a level death benefit for the rest of your life. Whatever the policy states is your death benefit that is the amount that will be paid upon death. This amount can be paid in one lump sum or as income. You make the choice.

Your whole life policy accumulates cash values every year as well as dividends if your life insurance company performs. These cash values build on a tax deferred basis. If you find yourself financially strapped you may take a loan from your policy. This would be limited to the amount of cash values accumulated up until that time.

Summary

• A whole life policy is a great financial instrument that at the time your death will provide your family with most needed cash or income.
• The death benefit remains level for as long as you keep your policy. It never decreases.
• The premiums remain level. They never increase.
• You policy accumulates cash values and may earn dividends if the company performs well. You can take a loan from your policy if you need to.

I hope this clears up the question; what is whole life insurance?