There’s not much you can be sure of, but there’s one thing you can believe in: if you’re born, you’ll die eventually. And while most of us don’t like to think about dying, planning for that eventuality is crucial.
One of the best ways to prepare financially is through an opening life insurance Policy If you have children or a partner, purchasing life insurance can protect your family from financial insecurity when you are no longer around to provide for them.
There are two main types of life insurance: duration And complete. The latter has an attractive cash value that can potentially be used by policyholders while alive. But is it worth the high price? Below we’ll dive more into whole life insurance to help you decide if it’s right for you.
If you’re in the market for life insurance, start by getting a free price quote so you know what to expect.
What is whole life insurance?
Whole life insurance is a life insurance policy that does not have an expiration date. Term life policies only last for a certain period of time, but whole life policies can last from the moment you buy a policy until you die.
There is a built-in whole life policy cash value, against which you can withdraw or borrow. Cash value usually takes several years to accumulate. If you withdraw some or all of the cash value, you don’t have to repay, but it will be deducted from the death benefit.
The death benefit is your amount Beneficiary You will get if you die while the policy is in force. The minimum death benefit is usually $50,000, while the maximum depends on your income. Policies are sold in increments of $50,000 or $100,000.
You must apply and be approved by a life insurance company to purchase a policy. This usually involves answering questions about your medical history and submitting to an officer test including blood and urine samples. Insurance companies will independently review your medical records before approving you. You may be able to get a whole life insurance policy without testing But it will come at a high cost.
Not sure what it will cost? You can get a free price estimate online now.
Benefits of whole life insurance
Some consumers use the cash value as a backup emergency fund. They can use the money to pay for a wedding for their children, a down payment on a house and more. The cash value will grow over time and can also be used to pay for premiums if you ever suffer financially.
The cash value will increase at a predetermined rate, which will be specified in your insurance contract. The rate is usually between 1% and 2%. As long as you keep making your payments, the insurance policy will be in good standing.
Who should buy whole life insurance?
If you have loved ones who will always depend on your financial support, a whole life policy can be a better option than term life coverage. High-net-worth individuals often choose to buy whole life policies because the payments will be exempt from estate taxes. Their beneficiaries can then use the life insurance policy to cover any estate taxes without having to sell important assets such as property or the family business.
Whole life insurance is also best for people who can easily afford the premiums, which can cost hundreds of dollars a month.
Get a free price quote here to see what it might cost you.
Who doesn’t need whole life insurance?
If no one is dependent on your income, you don’t need to buy a whole life policy (although in this case you wouldn’t need life insurance, regardless of type). If you are worried about funeral expenses, you can pay for them in advance so that your family does not have to cover the cost.
If you have loved ones who need your income, but you can’t afford lifetime premiums, you can too Buy a term life policy Instead. Term life premiums can cost hundreds of dollars less than whole life premiums.
Once the term is over, you can re-evaluate and decide whether you need to buy another policy. The term life premium varies depending on your age and health condition, but will remain constant for the entire term.
Ready to start? You can now use the table below to compare some of the top life insurance providers.
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