A Guide to Whole Life Insurance
A whole life insurance policy is the best choice for those who want life insurance protection for the rest of their life. Whole life policies, depending on the death benefit amount, are available without taking a medical exam. They are an excellent choice for final expense insurance for elderly parents.
Whole Life Insurance Has Guaranteed Premiums
Whole life insurance is a type of permanent insurance or cash value insurance with guaranteed premiums. When you make premium payments, you pay more than is needed to pay for the current costs of insurance coverage and expenses. The excess payment builds in the cash-value account. This cash value account allows the insurance company to charge a level, guaranteed premium, and to provide a death benefit and cash value throughout the life of the policy.
THE CASH VALUE ACCOUNT
As you make payments, the cash value account grows. With traditional whole life insurance, the cash value account is held in the insurance company’s general portfolio and is guaranteed. You don’t get to choose how the insurance company invests your cash-value account. However, the cash value can potentially grow beyond its guaranteed amount through the payment of dividends if the company is a “mutual company.” Typically you can choose to receive an annual check for the growth of the policy. However, you can use it to increase the death benefit of the policy.
The cash value grows tax-deferred and can either be used as collateral to borrow from the insurance company or through a partial or complete surrender of the policy. It is important to note, however, that a policy loan or partial surrender will reduce the policy’s death benefit, and a complete surrender will terminate coverage altogether. If you live to the policy’s maturity date, the policy will “endow,” and the insurance company will pay the accumulated cash value (equal at maturity to the death benefit) to you.
Universal Life Policies
Universal Life policies are another type of insurance to consider. An “indexed Universal Life” can is an excellent policy for retirement planning. Many people prefer coverage that is guaranteed to return payment at some point so that they feel that they are getting something back on their policy payments. There is a guarantee of payment with a whole life policy that isn’t there with a term policy. Once your term policy has come to the end of its term, it can convert to a permanent plan of insurance is an option. You are only guaranteed payment if you do die while the policy is in force. Remember though you do have a conversion policy moving it to a whole life policy.
Prepaid Funeral Plans & Whole Life
Most people will use a small whole life policy to cover funeral expenses. Prepaid funeral plans don’t cover all the final costs most people leave. Closing expenses are more than the funeral, casket, and burial service. With severe health conditions, you can apply for life insurance coverage through a guaranteed issue policy.
A Pre-Need plan will only cover the burial. However, an excellent Final Expense policy will pay the funeral plus give extra money to the beneficiary to cover the other bills that will pop up.
A Few Examples of Final Expenses:
*Credit card bills
*Hospital and health costs (which may spike at the end of someone’s life)
*Travel expenses for family attending the funeral
*A grandchild (or charitable cause) they may want to leave some money to, etc
*Money for their spouse now that they’ll have to live on one Social Security check
*Transportation costs if they die out of state
*Moving may render their prepaid funeral useless
*The ambulance ride to the hospital when they die
Funeral pre-planning is a loving thing to do. The last thing you want to do is give your loved ones the added stress of wondering if there’s going to be enough money to pay all their final expenses.
The biggest obstacle in purchasing life insurance that people seem to stumble over is not knowing how long they are going to live. You can estimate your life span by looking at your family history. However, the life span has many unknowable variables. If we could know, purchasing life insurance would be simple. If we knew we were only going to live ten years, the obvious choice would be to apply for a 10-year term policy if it was affordable.
HOW WE’RE DIFFERENT
- We are professional and knowledgeable
- We use the latest technology available
- We are customer-service driven
- We will earn your business
- We want to over-deliver on your expectations
- We want to earn a genuine “Thank you!” at the end of the process
WE ONLY USE TOP RATED COMPANIES
We use America’s top life insurance companies. These companies are well known and financially strong. And, they are very highly rated by impartial rating agencies. Of the over 800 life insurance companies active in the U.S., we only use the top 1%. Companies we recommend have an excellent reputation at paying claims promptly. They have a long, dependable history of operation in the United States. Many have been around for hundreds of years.
Whether you choose a term policy or a whole life policy, the choice you make here will be a personal one. Your choice may well depend on your financial circumstances and future goals. The critical thing to remember is that some form of life insurance coverage is vital for most of us. Life insurance is especially needed when we have a family to consider. You can get adequate protection from either kind of policy. And by moving forward and purchasing a life insurance policy, you can do something today that will outlive your life.