Buying Life Insurance

Whole Life Insurance

Unlike term and declining balance term life insurance, whole life insurance offers a cash value accumulation component along with permanent protection. Whole life insurance is also more expensive than term life insurance. This is because you are not only paying for life insurance, but also for an investment of your money. The investment can be in bonds and money-market instruments or stocks, or a combination of both. As the investment builds value, you can borrow money from the investment. Borrowed amounts reduce the death benefit and cash surrender value.

Sometimes, whole life policies are considered "forced savings policies" because it forces you to save money, and it works much like a retirement plan. Whole life insurance policies might even earn dividends.

Whole life insurance policies also come with a guaranteed cash value, so if you choose to cancel the policy, you would get the guaranteed cash value. The amount of your guaranteed cash value depends on the kind of whole life policy you have, its size, and how long you have had it.

Under current federal income tax law, the growth in cash value in a whole life insurance policy is tax deferred.

As with term life insurance, you can lock in the same monthly payment for whole life insurance over the life of the policy.

Please contact an insurance professional for a free life insurance quote.