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Most people who opt for a quote in whole life Insurance know very little about it because most of the important detail is left out during an online quotation process.  It is important to be aware that this type of policy fits certain needs that term life insurance simple can not meet

Permanent Life Insurance

The suggestion with this is that you can keep this policy for as long as you see fit, where it is to that age of a hundred.  As a comparison, a term life policy does not offer guarantee for this.

Cash Values

Whole life insurance has what is called “guaranteed cash values”.  These appeals to some people as it give a choice of using these cash values as some form of saving.  These can help college costs and offer a supplement for retirement fund.

Whole Life Insurance Dividends

Not all whole life policies are the same.  Although certain life insurance companies will have a great record of paying dividends on a regular basis, however, this does not indicate that they will always be in a position to pay dividend.  It is important to know that certain life insurance companies do not perform very well, so dividends are not guaranteed.

Those life insurance companies that pay dividends are the ones that manage to maintain good investments at the same time keeping expenses down.

The majority of people will apply their dividends to the purchase of “paid up additions” which are little simple premium whole life insurance policies.  It is important to know that there are several options available to choose from.  As an option you can also leave your dividend to accumulate interest or alternatively you can use your dividends to reduce premiums.  You can also receive dividends as cash each year.

The Importance of Cash Values And Dividends

For whatever reason in the future, a need arises for some emergency money and that cash is available through your cash values together with dividends, you have an option to part of this in a form of a policy loan.  Of course like any other loan, there will be interest charged on this loan.  The death benefit on your policy will also be reduced in relation to the amount you owe together will all unpaid accumulated interest.  The dividend paid to you will also be affected if you have an outstanding loan on the whole life insurance.

Nonforfeiture Values

These are an important consideration when buying life insurance.  Nonforfeiture values allow offer protection in the event of you not being in a position to maintain premium payments.

Automatic Premium Loans

Most whole life insurance policies will have a timely activation of an automatic premium loan which avoids the policy entering into a state of lapse.  Simply up, as long as you have enough cash value in your insurance policy, you do not lose your insurance.  Just like any other premium loan, interest is charged in this amount.

Extended Term Insurance

This is an option to automatic premium loan for you to keep you policy active.  This is a Term Life Insurance policy for as many years as the cash value of the policy will purchase.  The full face amount of the policy is paid to your chosen beneficiary in the event of your death.  The only downside to this option is that your cash values together with any dividends earned will dissipate over time.

Reduced Paid Up Policy

If you not in a position to pay premiums for your policy, you can chose to keep a reduced amount of life insurance in place as compared to the whole amount your originally purchased.  This policy, though for a reduced amount, will be fully paid up and you will never pay a premium again. At the time of death of the policy holder, the reduced death benefit will be paid.

Cash Surrender Value

You can also surrender your life insurance policy for the insurance cash value together with any dividends.  If there are any borrowings outstanding on your policy, they will be deducted from the amount you receive.

Waiver of Premium Rider

You have the option to add this when purchasing whole life insurance policy at a very minimal cost.  The benefit of this is if you become disabled during the time you hold the policy, your insurance provider will waive your premiums for the period time that you are disabled, whether it is for the rest of your life.  The disability is subject to a minimum period of time which is usually six months.  Premium payments can be resumed upon you going back to work.  Also note that you do not owe anything for the period you did not pay.

Accidental Death Benefit

Should you die in an accident, your life insurance company will pay two times the face amount to your beneficiaries with an “accidental death benefit rider” to your whole life insurance policy.  Some companies will permit you buying an additional unit of the accidental death benefit rider.  In other words, your family would receive three times the face amount of your whole life insurance policy if you died in an accident.

Premiums for whole life insurance are usually higher compared to term life insurance premiums.  But the above benefits may be worth the added costs for this type of life insurance.

Get a free quote by clicking below to see what options are available to you.