WHAT IS WHOLE LIFE INSURANCE
What is whole life insurance? Have you ever considered taking up a whole life insurance policy? Then you must have wondered at one point; what is whole life insurance? What is it all about and why have many taken it or are considering it? Well, you would probably get a lot of answers if you search the internet or ask your insurance broker but look no further; this is the answer to your questions about whole life insurance.
Simply put, a whole life policy is a life insurance policy that covers you for your whole life unlike a term policy that covers you for just a number of years. So, what is whole life insurance? Answer: an insurance to last you your whole life. Your premium cost would usually remain the same and is normally payable yearly. Your death benefit is also usually fixed. This type of insurance policy builds up a cash value which is basically an interest return on premiums that you have paid over the years. The interest was earned from the day the premium was invested by the insurance company and grows with each premium payment. This cash value is tax deferrable and you can even get loans against it.
Now that we have answered your questions about whole life insurance, another likely question would be about the choice or variants of available whole life insurance coverage. The options would include: traditional, which gives you a guaranteed amount as interest return on your cash value portion and Interest sensitive whole life policy, which gives a variable percent return on your cash value based on market forces. This way your premiums stay fixed but your death benefit may increase based on market value.
Single-premium whole life policy is fitting for someone with a large sum of money; this individual pays once for a life insurance cover. This type of insurance requires no further yearly premium payment but still enjoys same tax shelter and returns on cash value like other forms of whole life insurance. There are other forms of whole life insurance available and you may seek more information about whole life insurance either online or through your local agent.
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