Whole Life Insurance

Whole Life Insurance

Whole life insurance, also known as Traditional Life Insurance, provides permanent death benefit coverage for the life of the insured. In addition to paying a death benefit, whole life insurance also contains a savings component in which cash value may accumulate. Interest accrues at a fixed rate and on a tax-deferred basis.

Whole life insurance guarantees payment of a death benefit to beneficiaries in exchange for level, regularly due premium payments. The policy includes a savings portion, called the “cash value,” alongside the death benefit. In the savings component, interest may accumulate on a tax-deferred basis. Growing cash value is an essential component of whole life insurance.

Whole Life Insurance may be right for you, if you are seeking:

  • Insurance that lasts for a lifetime, as opposed to term life insurance, which is for a specific number of years.
  • A permanent policy with a death benefit and premium that won’t change over time.
  • Insurance that pays out to a beneficiary or beneficiaries upon the insured’s death, provided the policy is enforce.
  • Insurance that has a cash savings component, which the policy owner can draw or borrow from. The cash value of a whole life policy typically earns a fixed rate of interest. An outstanding loan principal and interest reduce death benefits.
  • To supplement existing insurance coverage. It is very common to own both a term policy and a permanent policy.

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