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In this page you will finally find what you have been looking for: whole life insurance explained! Whole life insurance is the original, most basic kind of permanent insurance and as such, many companies use the two terms interchangeably. However, permanent insurance portfolios have since developed sub-classifications such as variable life, universal life, and others to satisfy client demand for more financial options.
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Whole Life Insurance Explained: Benefits
The most attractive feature of a whole life insurance policy is its great cash value. This type of policy not only provides a financial cushion for beneficiaries in the event of the insured’s death, it also allows cash to build at an interest rate that cannot fall below the guaranteed minimum, without regard to any change in the state of the economy or the financial status of the insurance company.
Moreover, whole life insurance policy offers coverage as long as you keep up payments, regardless of any change in your state of health. This is one of the reasons why premiums are higher for whole life insurance as compared to temporary policies. It is important to keep these factors in mind while making whole life insurance comparisons to determine the best whole life insurance premium.
Whole Life Insurance Explained: Who Should Get It?
Many people think twice about getting this type of policy due to its high premiums. If you have mortgage dues, credit card bills, and college tuition to pay, having to shell out more cash to meet pricey whole life insurance premiums can really put a strain on your finances. However, if you want the following and can make adjustments on your budget, a whole life insurance policy may be for you.
- Lifelong insurance protection – If you never want to undergo another medical exam to get insurance, or answer detailed questions about your health, your lifestyle, your family’s medical history ever again, then whole life insurance is for you.
- Cash value – Similar to a retirement plan that grows cash on a tax-deferred basis, a whole life insurance plan also allows you to build assets tax-free. Whole life insurance assets are so valuable that they make excellent loan collateral at low borrowing rates, in case you need extra cash for some emergency. Moreover, unlike loans from banks or other financial institutions, borrowing against your whole life insurance policy will not subject you to a credit check or some other restriction.
- Non-fluctuating premium and death benefit – Whole life insurance guarantees that you will pay the same premium throughout your life, whether you are 26 or 62, and that the value of the policy (or death benefit) will build steadily throughout your life, without being affected by financial fluctuations in company or the economy.
- Management-free investment – Whole life insurance assets will build based on two factors: guaranteed interest and time. Your investment will grow without any need of administration on your part. All you will have to do is make the premium payments.
- Dividends – Aside from guaranteed minimums on cash value and benefits, dividends allow your whole life insurance fund to enhance in value. Insurance companies pay policyholders dividends as a way of sharing favorable investment results with them. Normally given on the policy’s second year, dividends may more than offset the effects of inflation on your whole life insurance.
Whole Life Insurance Explained: More Answers
Answers to the top 10 questions about whole life insurance can be found at www.ins.state.ny.us, the website of the New York State Insurance Department.
Hopefully this “Whole Life Insurance Explained” information has helped you in your research to make whole life insurance comparisons. Once you are ready to find your best whole life insurance premium, take advantage of our fast and free process to get your instant whole life insurance quote.
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