Whole life insurance, or standard life insurance, provides coverage for your entire life and guarantees a death benefit, as long as you continue to pay premiums. This insurance offers tax benefits as well as a cash value component that increases over time.
This type of coverage is perfect for those who are looking for both the benefits of life insurance and a way to use its cash value as an investment tool. If you are still on the fence about whether or not to invest in a whole life insurance policy, here are 5 benefits of doing so that may help you make your decision.
1. Lifelong Coverage
One benefit of a whole life insurance policy is that you will be provided with the benefits of permanent life insurance, as long as you continue to pay your premiums. If you pass away before your policy has lapsed, your beneficiaries will receive a payout. If you are looking for coverage that you know will protect you and provide security for your family during and after your life, this is a useful policy.
2. Fixed Premiums
Another benefit of having whole life insurance is that you are guaranteed a fixed premium. A premium is the cost of the policy that can be paid once a year, twice a year, or every month depending on who your insurer is.
It doesn’t matter if you pay over a short period of time or a long period of time, your premium will remain flat with a whole life insurance policy. Though premiums can be paid over a long period of time, some people pay it off quickly to make sure it doesn’t lapse later. No matter your decision, you can rest easy knowing that your premium won’t go up or down.
3. No Additional Exams
Something that is very beneficial when it comes to a whole life insurance policy is that additional exams are not required. This means that no matter how your health may change in the future, you won’t lose your coverage and you don’t have to take any more health exams for the insurance to remain effective.
Having your coverage or premiums lapse because of a change in your health can provide many hardships for individuals and families. Knowing that any future declines in health won’t affect your coverage can help provide you with peace of mind when it comes to affording your insurance.
4. Cash Value Accrual
This type of policy’s cash value has guaranteed, tax-deferred growth. This means that the cash value will not be taxed immediately, but later on in life. The cash value of a whole life insurance policy is why it is sometimes referred to as an “investment vehicle.”
You can use the cash value to:
Acquire a tax-free loan
You can use the cash value of your policy to receive a tax-free loan. Life happens and sometimes it can be very hard to get a loan through the bank when you need one. A whole life insurance policy can be used for a mortgage or other needs in case of an emergency. This policy provides you with a constant backup plan in case you are in need of money.
There may be tough times in which you can’t afford your premium. Whether it is only a monthly payment or an annual payment. You don’t want to be stuck stressing out over a way to pay for it. You can use the cash value of your policy to do this, taking some of that worry off your shoulders.
Get more coverage
If you are looking into getting more coverage but don’t necessarily want to pay for it out of pocket, you are able to use the cash value of your policy toward your purchase. This is a perfect way to invest in more protection using the coverage you already have.
5. Option to Surrender
It isn’t unlikely for one’s financial situation to change throughout life. If this is the case or you want to prepare for the possibility. You can surrender your policy and receive its cash value back from your insurer. If you can’t afford your coverage anymore and need to use that money for something else. You can get some of your money back to use for other needs.
Contact Matador Insurance
You may still be wondering if you should invest in a whole life insurance policy. If the cash value accrual or fixed premiums didn’t sell you, then you may need another opinion. For a free consultation, you can contact Matador Insurance to discuss the pros and cons of having whole life insurance.
Don’t leave yourself and your family unprotected in case of an emergency, or worse, your death. Consider investing in an insurance policy to protect yourself and your loved ones.