Whole life insurance offers lifelong coverage with a guaranteed death benefit. It’s often used for estate planning andwealth transfer. A 50-year-old individual could purchase a whole life policy with a $750,000 death benefit. As the yearspass, the policy’s cash value grows, and it can be used for various purposes, such as supplementing retirement income, funding a child’s education, or leaving a legacy for beneficiaries.
Whole-Life Insurance: Who Benefits from It? A Lifelong Commitment
Whole-life insurance is a permanent life insurance policy that offers more traditional benefits. Premium payments typically remain constant throughout the policy’s lifetime, allowing policyholders to accumulate interest. The defining feature of whole-life insurance is its lack of an expiration date and the inclusion of a savings component. Policyholders can take out tax-free loans from their policy based on the premiums they’ve paid. While these loans are not interestfree, they can be a valuable financial resource during challenging times. Whole-life insurance also provides the option to use accelerated benefits to cover long-term treatment for terminal or chronic illnesses or to surrender the policy for cash. Those who choose whole-life insurance typically have a long-term commitment to supporting a spouse or permanent dependents.
