Whole Life Insurance

Finding the right life insurance plan can feel like an overwhelming process. The terminology and amount of plan choices can make it difficult to really narrow down what type of insurance would provide the best financial protection for your loved ones. At IntelliQuote® we’re here to help make it quick and easy to find the right life policy. In addition to an online quoting system, we also have an experienced team of licensed insurance agents who are here to offer advice and answer questions if you’d like additional help. Read more about whole life insurance plans to see if they’re the best choice for your needs.

What is Whole Life Insurance?

Whole life plans are a type of life insurance policy that provides coverage for life. With whole life insurance, you pay a monthly premium for the entire life of the policy. Whole life plans are made up of two components–the death benefit and the cash value. Every month one part of your premium will be paid towards the insurance protection that guarantees that the named beneficiary of your plan will receive a cash lump sum upon your death or at the maturity date of the policy. The second part of your premium will be paid into the savings (cash value) part of your plan; this account can grow and earn interest to potentially increase the amount your loved ones receive upon your death. As long as the policy remains active and does not lapse for some reason – say for example you fail to make the necessary premium payments – these policies are guaranteed to pay a death benefit.

What are Whole Life Insurance plans used for?

Whole life insurance plans provide financial protection for families when the policyholder passes away. They provide a cash lump sum that can be used to cover expenses such as funeral costs, medical bills, estate taxes, childcare, mortgage payments, etc. Many people also use them to leave a legacy to their family that can pay for college education, weddings, and property down payments. They give peace of mind to the policyholder as they know that their family will be protected from financial difficulties after they pass away.

Whole Life Insurance vs. Term Life Insurance – which is right for you?

If you’re contemplating the purchase of a life insurance policy, but you are confused about the differences between the two major policy types keep reading to learn more. To help you understand how these policies can fit into your financial planning, we’ve outlined the distinctions between the two types of insurance, the benefits of each, and which one might suit you and your lifestyle best.

The main thing to remember is that in simple terms, the difference between whole life insurance and term life insurance is the length of protection. Whole life insurance policies provide lifelong protection, whereas term insurance provides coverage for a predetermined period. In addition to the bulk payout, whole life policies also have a savings feature known as “cash value” or “cash surrender value” not found in term insurance policies. To determine which insurance is better suited for your needs is the length of time and amount of coverage you would like the plan to provide. If you need a large amount of protection, say $500,000 to cover an expense that will only be an issue for the next 20 years, then a term plan is perfect to cover your goals. Term life insurance offers very affordable coverage for fixed periods. However, if you want a guaranteed payout to cover something like end of life costs for the next 70+ years then you should look at a whole life policy. If you’re unsure how long you’ll need coverage for our licensed agents can talk you through your options to find the right plan for your coverage needs.

Term vs. Whole Life Insurance: Advantages and Disadvantages

Advantages of Term Insurance:

  • It is the most affordable insurance.
  • Term Life is the simplest form of coverage to secure.
  • It offers set premiums and coverage for a defined number of years.
  • You can purchase additional benefits through riders.

The Disadvantages of Term Insurance:

  • Terms and their fixed premiums only last for a set period.
  • Extending your coverage when you are older will increase premiums.
  • New terms require re-qualification by passing a new medical exam.

Advantages of Whole Life Insurance:

  • The policy’s cash value can be converted into cash or an annuity. The guaranteed cash values can provide money at a later time and help with temporary needs or emergencies.
  • A provision or rider can be added to a policy that gives you the option to purchase additional insurance without taking a medical exam or having to furnish evidence of insurability.
  • With level premiums and the accumulation of cash values, whole life is an excellent choice for long-range goals.

The Disadvantages of Whole Life Insurance:

  • Required premium levels may make it hard to buy enough protection.
  • Premiums are higher than those for term life insurance.
  • Coverage may cost more during the early years of coverage when the need for protection is often greatest.
  • Your coverage needs change as you age, meaning you could end up paying for protection for expenses that will disappear in time, such as mortgages or childcare costs.

The Different Types of Whole Life Insurance

There are several different types of whole life insurance to consider. Each offers unique benefits that may help you get the coverage that works best for your family.

Whole Life Insurance:

  • Provides a lifetime guaranteed death benefit, a guaranteed fixed premium, and guaranteed cash values.
  • Have the excess earnings of the insurance company credited to your cash value either as dividends or as excess interest?
  • Your cash values can be used to pay future premiums, fund retirement and college education, and provide emergency cash reserves.
  • Typically provides the best investment rate of return per dollar of premium.
  • Perfect for those who want a guaranteed permanent coverage with a guaranteed premium for the rest of their life.

Universal Life or Adjustable Life Insurance:

  • A flexible, permanent product that allows policy holders to design their own plan.
  • You can adjust your premiums from year to year, increase or decrease your death benefit, and still accumulate savings with tax advantages.
  • An ideal policy for first time buyers that are budget minded with young families and changing needs.
  • It is often used as a low cost, level premium alternative to Term Insurance when coverage is needed for many years.
  • Universal life insurance provides a guaranteed death benefit with a low, level premium.

Survivor Life Insurance (Second-to-Die):

  • This plan covers two lives, typically a husband and a wife, or business partners.
  • Plans are designed to provide cash to cover estate taxes or business liability, to be paid after both people have died.
  • The survivor plan premium is less than if individual coverage was purchased on each life.
  • Plans can be based on either whole life or universal life insurance.

Find the right life insurance today

Whatever type of whole life insurance you are looking for, the IntelliQuote online quoting platform can help connect you with best whole life insurance plan for you. Use our online quoting system to compare whole life insurance rates from the comfort of your home. Our licensed agents are also available to answer any questions and offer advice on choosing a plan. Find the whole life insurance policy you need, today!