Why Whole Life Insurance
Whole Life Insurance is often referred to as permanent life insurance. Unlike term life insurance, whole life insurance remains in force as long as you make your premium payments on time and the premiums remain level throughout the policy’s lifetime. It builds cash value and can be borrowed against the cash value of the policy in the event of an emergency.
The Death Benefit
The death benefit of a whole life is stated in the policy face amount. If the policy is participating, then the death benefit will be increased by any accumulated dividend values and/ or decreased by any outstanding policy loans.
Uses for Whole Life Insurance
Many people find whole life insurance attractive since it offers coverage to age 100 in comparison to term which is used for periods up to 30 years. Whole life is used for funeral expenses, estate planing, and to supplement retirement income.
Level Premiums
Whole life premiums are higher than term life insurance premiums because term premiums rise as the age of the insured increases. The cumulative value of all premiums paid under a whole life and term policies are roughly equal if the policy continues to average life expectancy.
Whole life may prove to be a better value than term for someone with an insurance need longer than ten to fifteen years due to favorable tax treatment of interest credited to cash value of the policy.
What Are The Tax Consequences of Whole Life Insurance?
Death benefits paid from life insurance policies are income tax free. Generally, inheritance proceeds are subject to estate taxes, structuring a whole life insurance policy in way that allows income to pass to heir’s federal income free can be done with an advisor from Qwik Life Insurance.
How Can I Start Accumulating Cash Value?
This can be accomplished by purchasing a permanent life insurance policy such as Whole Life or Universal Life Insurance. Contact Qwik Life Insurance for details.