What is Whole Life Insurance?
Whole life insurance is a kind of permanent policy that provides a life insurance benefit for one’s whole life with the options to pay premiums for only couple years, 7 years, 10 years, 15 years or right up to your retirement with a guaranteed life time of protection. Whole life also offers guaranteed cash value (like equity in your house) inside the policy with a very attractive dividend rate of return. The cash value inside the whole life policy grows tax-deferred and can be taken out anytime tax-free through a cost basis withdrawal and/or as a loan for any purpose. Whole life insurance cost.
Who is Best Suited for a Whole Life Policy?
Anyone from age 1 month up to age 65 who is looking for a permanent protection and an attractive savings vehicle is best suited for a whole life policy. After one reaches age 65 they may be better suited with a guaranteed universal life policy for only permanent protection needs if they are looking for cash value accumulation.
What are The Benefits of Whole Life Insurance?
It provides lifelong death benefit
You don’t have to pay premiums for your entire life. You can finish premium payments in as little as few years without losing any tax advantages
Cash values inside the policy grow tax-deferred (NO 1099 form EVERY YEAR – as you get from your Bank)
You can take out cash value any time tax-free through a cost basis withdrawal and/or loan distribution strategy
Your cash value is protected from litigation and lawsuits
Where to buy term life insurance
Cash value is invisible inside your whole life plan for financial aid applications for college
With a “Waiver of Premium” rider your premium will be waived up to you reach age 65 if you become totally disabled
NO STOCK MARKET INVESTMENT RISK in whole life plan
Very attractive NET Rate of Return compared to bank, bonds or fixed income securities or stock market returns
No limitations on contributions when you compared to a Roth IRA and Roth 401K
Whole Life is the only policy that provides THREE guarantees – Guarantee of cash value, Guarantee of premium will not increase and a Guarantee of original death benefits will not decrease. No other kind of policy provides these three guarantees.
Are There Any Cons to Whole Life Insurance?
You need to be in a good health to qualify for it and to achieve an attractive rate of return
It takes time to grow your cash value – It’s a long term savings vehicle
How Much Whole Life Insurance Should You Get?
Based on the above benefits, there is no other savings or investment vehicle available that can offer similar benefits of a whole life policy. So you should get as much as you can get approved for by the insurance company (normally companies approve between 10 to 20 times your income) or as much as you afford to pay premiums for.
Technically, there are two methods to calculate how much Life Insurance you need to protect your family.
First, there is the Human Life Value, where you multiply your annual income by the number of years you have left to work. (Example: John is 45 years old, plans to retire at age 65 and earns $250,000 per year, in order to protect his family, he should have at least $5,000,000 ($250,000 x 20 years) in coverage.
The second method is the Needs Based planning method, where you calculate your monthly expenses and future needs, such as your children’s education and any mortgage or loan payments and purchase coverage based on that amount.
Term life prices
What is The Next Step?
It’s very simple. Please call (877) 972-3262 to speak with our expert advisor or complete contact us form now. We’ll take care of the rest. We’ll compare top companies and find the best policy for you.