What is Whole Life Insurance?

The two basic types of life insurance

To focus on whole life insurance, and to understand just what it is can be necessary as well as helpful when making that decision to purchase. Whole life, and term life insurances are generally the two types of life insurance that are considered by potential policyholders when shopping for life insurance.

Deciding how much life insurance is enough, and considering the cost of the premiums

When considering purchasing life insurance the main reason to do so is for the death benefit which is the amount that is paid under the policy at time of death. Having to decide how much life insurance they should actually purchase in the event of death, and to consider family members financial situation at the time of death along with just how much they can afford to pay in monthly premiums are all very important to consider.
Being a form of permanent life insurance is protection for a life time, and as long as the premiums are paid it cannot be cancelled.

Building cash value, and when can you withdraw money

Whole life insurance also builds a cash value in addition to the protection, and this is very attractive to buyers. Normally this money can be withdrawn in case of emergency, or at the time it is actually needed. However policyholders do not have access to this money immediately since policyholders have some time that they must wait to withdraw it which is generally two to three years of continuous payments of premiums. Additionally they must not withdraw more than the limit of the actual policy. By borrowing against the cash value, and not having paid it back that amount will than be subtracted from the amount of the policy. Borrowing money from the policy is also tax free which is beneficial for the policyholder since the cash value actually increases with no taxation.

Premiums never increase

The insurance is designed for long term with payments remaining the same each and every month, so monthly premiums can never change, or increase as they would with term insurance.

Protection to age 100

Because a policy will give protection till age 100, and so the policyholder will receive the cash value of the policy if he, or she survives to the age of 100.

Variations of whole life

Also known by whole life insurance is a variety of other names such as Permanent life, Ordinary life, Standard life, Universal life, Adjustable life, Variable life, and also Survivor life. Each of these have their own variations of insurance as Universal life being one of the most popular variations, and with Permanent life generally referred to as another name for whole life.

Protection of cash value from law suites

In some states if sued the money is considered to be protected because someone else like the beneficiary will benefit from it.