Whole life insurance features a level premium and level death benefit to age 100 with an accumulating cash value that increases over time until it equals the set death benefit. Whole Life covers you for as long as you live, if the premiums are paid.
Cash value is an amount of money that you are guaranteed to receive in the event of policy cancellation. Your premiums are invested on behalf of the policy, generating the build-up of the cash value. Over time, your premiums grow like any other investment and the rate or return (yield) can vary from company to company. You also have the right to borrow against the accumulated cash value for whatever reason you choose - to make purchases, cover expenses or to apply towards the premium itself (in effect paying for itself).
When you first take out the policy, premiums may be higher than you would pay initially for the same amount of term insurance. They will be smaller than the premiums you will eventually pay if you were to renew a term policy until your later years.
Whole life is suitable for long-term obligations, such as surviving spouse lifetime income needs, estate liquidity, death taxes, funding retirement needs, etc. It also provides a good cornerstone for a complete protection package for your family and your assets. A professional analysis can help you assess you current and future needs to determine the best overall life insurance approach for you.
Rates and coverage vary form state to state. Shop around on your own and talk to an independent insurance agent to make sure you get a plan that's right for you. It's amazing how much rates may vary from company to company for the same coverage. For more information and rates on life insurance visit www.grouphealthplans.com .
