Whole life insurance quotes reflect a broad range of permanent life insurance policies. Permanent life insurance lasts for the entirety of a policy-holder’s life, and then pays out a lump sum of tax-free cash benefits to loved ones upon your death. This is different from term life insurance policies that only cover you for a specific period of time before they expire.
Another main difference is that whole life insurance quotes reflect policies which include a cash value savings component. This means that the value of your policy increases every month as you continue paying your premiums. It can be thought of as a savings account that pays out benefits to your loved ones if you die prematurely.
The cash value feature of whole life insurance is similar to that of other permanent policies such as universal and variable life insurance.
How It Works: Whole Life
A set amount of money is paid out to everyone you name as a beneficiary when you die. This is also known as a “death benefit.”
Monthly or annual premiums must be paid by the policyholder to keep the policy active. Every month, a portion of your paid premium will be put into the cash value savings component. The insurance death benefit slowly decreases while the cash value grows.
The insurer predetermines a small amount of interest that you will receive on the cash value. And once the cash value holds 100% of the money in your policy, benefits will be paid out.
Keep in mind that whole life insurance is much more complicated and a lot more expensive than term life insurance policies. Therefore, it’s usually not the best choice for insurance shoppers.
to be the absolute highest. Generally, you will be paying at least three times the cost of term life insurance.
Is it right for you?
Pros & Cons of Whole Life
• Give your family the ability to cover debts in the event that you die early
• Tax-free inheritance guaranteed to beneficiaries
• Cover end-of-life costs
• Lower rate of return compared to other forms of investment
• More expensive compared to term life insurance for same death benefit coverage
Whole Life Riders
Riders are additional benefits added to the policy which are often optional and come at an extra cost.