Whole Life Insurance
Whole life insurance is also referred to as permanent life insurance. It provides you with coverage for your entire life; as long as you make premium payments on time. This option is great for long-range goals and there are guaranteed cash values; you can use these later on for temporary needs or emergencies. It is best to get this option when young because your annual premiums will be lower.
Dividends are also earned with whole life insurance; this occurs when life insurance costs end up being less than what was assumed when the premiums were set. Most insurance companies will pay you a portion of your life insurance as a dividend. Dividends are not a guarantee since insurance companies do not know up front what the actual costs will be.
Accumulated cash values are guaranteed with a whole life insurance policy. Cash values are built up with the money you pay on the policy. If you decide to surrender the insurance policy, the cash values will then be available to you. You may also borrow against them as a policy loan (at its current interest rate) as long as your policy is in force.
The amount of your cash value all depends on the policy you have, how long you’ve had it and its size. The cash value’s growth is tax-deferred under state federal income tax law. Keep in mind that by borrowing from your policy will reduce the death benefit and cash surrender value.
Whole life insurance options
Economy Life – affordable protection for your entire life.
Superior Value Life – emphasis on lower premiums than cash accumulation (no health screenings).
20 Payment Life – entire life protection, but only have to pay premiums for 20 years.
Legacy Master – one time premium payment; has tax deferred living benefits and income tax-free death benefits. It also leverages assets you want to pass on to beneficiaries.