According to some research, 54% of people in the United States are covered by some type of life insurance.
If you’re interested in using life insurance, you might want to consider a whole life policy.
But what is it and what are the benefits of using one? Keep reading to find out!
What Is Whole Life Insurance Policy?
A whole life insurance policy is a type of permanent life insurance. This means that as long as you pay the premium, you’ll be covered for the rest of your life.
Not getting one could be a bad life decision because it also serves as a way to invest.
Under this type of life insurance, your money will go toward funding your policy’s death benefit and paying all the administrative costs. However, it’s also tucked away into a savings account that will grow throughout your life.
You can borrow this money at any time, use it to pay your premiums, or take it out and invest in something else.
One of the benefits of this type of life insurance policy is that it never expires as long as you pay the premiums.
It’ll be paid regardless of when you die, even if that’s in a month or eighty years away.
This is the main difference between whole and term life insurance. One will only pay for the amount of time between when you opened it and when you die.
There are also many tax advantages to opening this. For one, the death benefit is tax-free.
You can only borrow your cash value without paying taxes if you pay the loans back properly.
In the cash value growth, that is also deferred from tax. You’ll only have to pay taxes on it if you give up your policy and take out some of the money.
Who Should Consider It?
This is a great policy for a lot of people, but it will really help people who have a lot of wealth. This is a great way to avoid paying high taxes while also getting the policy’s value.
On the other hand, if you have trouble saving money, this could be a great option. This will force you to put money into the cash value portion, and the money will build up without you even noticing.
It’s also great for people who want to ensure their loved ones have money after their death. As long as you pay the premiums and comply with all the requirements, the policy will be in effect. When you die, your loved ones will receive the death benefit to help them with financials after you pass.
Learn More About a Whole Life Policy
These are only a few things to know about getting a whole life policy, but there are many other factors to consider.
We know that trying to find a life policy can be overwhelming, but we’re here to help you out.
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