If you want to save on life insurance consider getting a whole life insurance. Understanding the benefits and advantages of whole life insurance can provide financial freedom for your family in the future.
A whole life insurance policy is sort of a permanent or “straight” life insurance coverage. This policy is going to cover the insured for his / her entire life. The greater popularity and the increased demand of the whole life coverage is because it provides financial protection to the insurer and his or her family. The policy will also accrue a cash value and will also pay dividends.
So what are some of the advantages of whole life insurance?
1. The first advantage is The Death Benefit.
The whole life insurance policy guarantees you the death benefit that never decreases. Moreover no federal income taxes are charged upon death. And if you desire, death benefit can be taken as a monthly income instead of a lump sum.
2. Consistency of premium level.
Unlike term life insurance’s premiums, which increase at the time of renewal, the premium you pay in whole life insurance remains consistent. There’s no increase. However, use of dividends can minimize the premiums that you pay and contracted for.
3. “Cash value” is another beneficial feature of whole life insurance.
Unlike other life insurance policies, whole life insurance policy accumulates the useable cash reserves. This increase as one pays premiums and also accumulates tax deferred. And if you decide to surrender the policy, you receive your cash values.
4. Participation in whole life insurance policy earns you the dividends.
You are eligible to earn dividends if you own a participating whole life insurance policy. You receive this dividends in cash, which you can further use to either purchase a paid up additions, to minimize premiums or you can keep it within the policy to generate interest.
These advantages of whole life insurance policy are really worthwhile. If you are not confident you should consult an expert before taking up any policy.