Learn 7 Benefits of Whole Life Insurance
The Benefits of Whole Life Insurance Policies
Why should you get whole life insurance? Many policyholders value the flexibility and security of life insurance coverage. Other benefits of whole life insurance include:
1. Peace of mind
Whole life insurance covers you for your entire life, so you don’t have to worry about losing coverage after a specific age. You can rest easy knowing that your loved ones’ finances will be taken care of in an emergency. Having whole life insurance also means you won’t have to worry about renewing or altering your coverage.
2. Lifelong protection
Whole life insurance provides coverage for your entire life. The coverage remains in effect as long as you continue to pay premiums, regardless of changes in your health or lifestyle. So, even as you age and your health may deteriorate, you won’t have to worry about the term expires, and your family will always be protected.
3. Cash value savings option
A cash value component is included in many whole life insurance contracts. When you pay a premium, a portion of the money is deposited into a cash-value account. Like a savings account, this account earns interest over time and is tax-deferred, so it is not taxed until you or your beneficiaries access it.
You can borrow against it for any reason, surrender your insurance, and cash out the entire sum. It’s a good idea to contact a tax advisor before borrowing or cashing out a whole life insurance policy to understand the tax ramifications.
4. The possibility of earning dividends
Many whole life insurance policies include a cash value component that grows as premiums are paid. Some insurers also allow policyholders to receive annual dividends based on the insurer’s performance.
You can receive the money in cash, put it in an account to earn interest, use the profits to buy more insurance, or pay premiums. Dividends are almost always tax-free.