Advantages Of Whole Life Insurance

Advantages Of Whole Life Insurance

Whole life insurance, also known as “permanent” or “straight” life insurance, is one of the most widely used forms of insurance. This life insurance policy covers one’s entire life. This is much in demand because of its ability to provide financial protection, accrue cash value, and pay dividends to the insured. In other terms, you can say that it is an investment that you make to secure your future and build up finance that helps you in your indigence.

Taking out a whole life insurance policy has a number of benefits and advantages. A few of them are listed below.

1. The first advantage is the death benefit.
The whole life insurance policy guarantees you a death benefit that never decreases. Moreover, no federal income taxes are charged upon death. And if you desire, the death benefit can be taken as a monthly income instead of a lump sum.

2. Premium level consistency.
Unlike term life insurance’s premiums, which increase at the time of renewal, the premium you pay for whole life insurance remains consistent. There’s no increase. However, using dividends can minimize the premiums that you pay and have contracted for.

3. “Cash value” is another beneficial feature of whole life insurance.
Unlike other life insurance policies, a whole life insurance policy accumulates useable cash reserves. This increases as one pay premiums and also accumulates tax-deferred. And if you decide to surrender the policy, you receive your cash value.

4. Participation in a whole life insurance policy earns you dividends.
You are eligible to earn dividends if you own a participating whole life insurance policy. You receive this dividend in cash, which you can further use to either purchase paid-up additions to minimize premiums or keep it within the policy to generate interest.

These advantages of a whole life insurance policy are really worthwhile. If you are unsure, you should consult an expert before implementing any policy.

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