Whole life insurance is a permanent life insurance policy. This type of policy provides permanent death benefit coverage for the insured as long as the policy is in force at the time of death. Whole life insurance contains a savings element in which cash value may accumulate. This cash value typically earns a fixed rate of return and is a key element of a whole life policy. The policy owner can draw or borrow from this cash value, but any outstanding loans and interest will reduce the death benefit paid to beneficiaries.
Benefits of Whole Life Insurance
Whole life is permanent insurance — The key difference between a whole life policy and term insurance is as long as you pay your premiums, your death benefit will last your lifetime
Premiums will remain consistent — Premiums are paid monthly, quarterly or on an annual basis. The premium amounts will be guaranteed to remain the same for as long as you have your policy in force. The premiums paid on this policy will contribute to its cash value.
Policy will build cash value — A portion of your premium payment will be added to your policy’s cash value which can increase within the policy. This cash value that builds over time is available to you at any time, but will reduce the death benefit and could have an impact on the policy in general.
Flexibility — Since these policies have the potential to accumulate cash value over time, policyholders have the option for a variety of reasons to use the cash. However, you might choose to simply leave it alone with the goal of increasing your cash value over time.
Can earn dividends — Many life insurance companies pay dividends to your policy. You have the option to take the dividends as cash or help pay or premiums. Many policyholders will re-invest these dividends into their policies which will cause the cash value to accumulate more quickly.
Tax-Free Death Benefit — Your beneficiary or beneficiaries will receive a lump sum payment upon your death. This benefit is tax-free, so your beneficiary or beneficiaries can keep the full amount.
Tax-deferred growth — The cash value that accumulates over the life of the policy is tax-deferred.
Schedule a Meeting to Learn About Whole Life Insurance
Not sure where to start? Contact Safe Harbor to learn more about whole life insurance options. We offer a complimentary consultation to review your current coverage and can provide a life insurance strategy that will provide the coverage your family needs. Call our office at (614) 760-0670 to schedule your initial consultation.