Whole Life Insurance Quotes

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Whole Life Insurance QuotesExplained

Whole life insurance quotes reflect a broad range of permanent life insurance policies. Permanent life insurance lasts for the entirety of a policyholder’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.

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How Whole Life Works

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.

Here are some key features to take away:

The policy lasts your entire life

A death benefit is guaranteed

Cash value savings are guaranteed

Interest is earned at a predetermined rate

Premiums always remain level

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Average Costs

Because whole life insurance guarantees a pay out to policyholders, whole life insurance quotes tend to be the absolute highest. Generally, you will be paying at least three times the cost of term life insurance.

Here are some average whole life insurance costs:

$100,000 Coverage: $1,030/year, $89/month

$250,000 Coverage: $2,440/year, $212/month

$500,000 Coverage: $4,800/year, $420/month

$1,000,000 Coverage: $9,510/year, $827/month

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Pros & Cons

Why Buy Whole Life Insurance
  • Build savings that earn interest on premiums over the course of your life
  • Give your family the ability to cover debts in the event that you die early
  • Cover end-of-life costs
  • Tax-free inheritance guaranteed to beneficiaries
Why Not to Buy Whole Life Insurance
  • Very few investment options available for cash value eventually comprising all death benefits
  • Lower rate of return compared to other forms of investment
  • More expensive compared to term life insurance for same death benefit coverage
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Whole life insurance quotes may or  may not include riders, depending on the insurance company and products offered. Riders are additional benefits added to the policy which are often optional and come at an extra cost.

Some popular return of whole life insurance riders include:

Long Term Care Rider

In the event that during old age a policyholder requires long-term medical care that the policy
refuses to pay for, this rider will cover the costs. Long-term care payments are made monthly.

Disability Waiver of Premium Rider

If you as the policyholder become disabled and lose your source of income, disability waiver of premium lets
you skip payment of your premiums until your recovery. No worries about the policy being cancelled.

Accelerated Death Benefit Rider

This rider gives you early access to death benefit cash in the event that you become terminally ill.
The benefit can be used to pay for medical care expenses. Being diagnosed with 12 months to live is
generally the terminal prognosis. But some states hold theirs at 24 months.

Family Income Benefit Rider

If the policyholder dies prematurely, family income benefits provide a steady monthly source of income
to all named family beneficiaries to cover costs in addition to receiving death benefits.

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Alternative Permanent
Life Insurance Types

Variable Life Insurance

Functions similarly to whole life insurance. However, more investment choices are presented for
cash value components. Variable return rate investment funds reflect market trends, giving you
a higher potential return at the cost of choosing a riskier option.

Universal Life Insurance

Also similar to whole life insurance. The differences include increasing premium costs over the term,
use of cash value to pay premiums, and cash value growth rates set by the insurance company.

Final Expense Insurance

Life insurance meant for seniors that covers end-of-life costs. These policies
are generally sold for smaller coverage amounts such as $10,000 or $25,000.

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Other Types
of Life Insurance

Term life insurance policies are the other main types of life insurance along with permanent life policies such as whole life discussed in this article. Unlike permanent life, whole life policies only last for a set period of time rather than your whole life.

These terms typically last between 10 and 30 years, or as long as the insured person has dependents. And term life is much cheaper than whole life policies.