What Is Whole Life Insurance?

Whole life insurance is a type of permanent life insurance that covers the insured party for as long as they live, provided they continue paying their premiums. The death benefit from a whole life insurance policy is almost certainly guaranteed to the beneficiaries, regardless of how much time has gone by since the policy was purchased. The premiums for a whole life insurance policy generally do not fluctuate and the policy’s cash value grows at a fixed interest rate, as opposed to universal life insurance which offers more flexible premiums and is subject to changing interest rates.

The Benefits of Whole Life Insurance

A whole life insurance policy is suitable for a client who is considering their long-term responsibilities, such as ensuring income for a surviving spouse. Unlike term life insurance, whole life insurance policies include a cash accumulation feature that can generate value over time. With such a feature, clients are able to take out loans from the cash value that has accumulated in their whole life insurance policies as a way to help pay expenses — such as retirement costs or your children’s college expenses — while still retaining their overall coverage. As with any other kind of life insurance, the younger and healthier a person is when purchasing the policy, the more affordable it will be.