As the name indicates, Whole Life Insurance is the type of insurance that covers the whole life. In other words, it is permanent insurance that covers the complete life duration of the person as long as the premiums are paid on time. Therefore, this term is the same as permanent insurance, which is quite different from life insurance.
What is the difference between whole life insurance and life insurance?
Remember that whole insurance is for a lifetime. In comparison, Life Insurance is only for a set period such as two decades, 30 years, etc.
Thus, we can say that whole life insurance and permanent Life Insurance are similar terms, while Life Insurance is an entirely different term that covers only a portion of a person’s life.
What are the benefits of whole life insurance?
Although there are many benefits of this, the most prominent one is the guaranteed death benefit.
Let’s have a look at some of the great benefits of whole life insurance.
It builds cash value
For whole life insurance, there is always a savings component of policy in which some of the cash you pay as a premium goes into the savings account. So if your family needs money even before your death, you can withdraw the amount from the savings account. Thus, we can say that whole life insurance provides real-time benefits even before you pass away. When you pay premiums, some of the cash accumulates in your savings account that you can readily withdraw at the time of need.
It requires a fixed premium.
Premium is the amount that the insured pays on a monthly or yearly basis. That person remains eligible for the payment as long as they continue to pay the premium.
Unlike other types of insurance, the insured does not have to pay a variable amount as a premium, and they can continue to pay the same amount for a lifetime without any increase.
However, here it is worth mentioning that a fixed premium means that you will get the fixed benefit after your death. In this way, the near and dear ones can also calculate the death benefit by calculating the fixed premiums.
How much does a whole life insurance costs?
The cost of whole life insurance is variable, and it depends on how much coverage the person has selected. However, as we have already discussed, life insurance demands fixed premiums so a person can easily estimate their expenses and budget accordingly.
Who is eligible for life insurance?
It is best for the individual who cannot pay for the variable premiums and want only a fixed amount—fixed premiums are often less burdening financially; however, they give fixed benefits.
The bottom line
Always consult your local agent if you wish to purchase whole life insurance or receive your latest information on the insurance that best fits your needs.