Whole Life Insurance
Whole life insurance is permanent life insurance and provides protection for an individual's entire life. As long as premiums are paid, the policy's beneficiary is entitled to the death benefit upon the insured's death.
Policy premiums are designed to remain level over the life of policy. In addition, these policies accumulate cash values on a tax-deferred basis. The cash value earns a rate of return over time that is dependent upon a number of factors including the results of an insurance company's investment performance. Cash values are accessible to the owner of the life insurance policy and can be used for a variety of options:
- The policy can be surrendered at anytime for the cash surrender value.
- Policy owners can take out a loan and use the cash value as collateral.
- The policy can be changed using the cash value to purchase a reduced paid up death benefit amount.
- Cash values may be used for a certain period of time to cover premiums still due on the policy.
- The cash surrender value can be used to supplement retirement income.
Whole life insurance policies are valuable because they provide permanent protection. Their accumulating cash values can be used for emergencies or to meet particular, unforseen objectives.