WHOLE LIFE INSURANCE PLANS
A
whole life plan is like a term insurance plan with no fixed policy duration.
The plan runs for the entire lifetime of the insured until the insured attains
99 or 100 years of age. During this period, if the insured dies, the sum
assured is paid as the death benefit.
ADVANTAGES OF WHOLE LIFE INSURANCE
The cost of the premium paid to the policy never increases, as the policyholder plans perfectly to pay the insurance and not to get lapsed.
In whole Life Insurance, due to the changes in your health and age, as you get older, your changes of dying increase. Since the life insurance company takes on the risk they don’t increase the cost of premium.
In whole life policies, the premiums paid so towards increasing the cash value and, if you are willing to pay more, increasing the death benefit further your cash value earns interest similar to a savings account.
Cash value and death benefit can never decrease in value
unless you start withdrawing the cash value from the policy.
In whole life insurance policy, you pay the premiums with
after term. The cash value grows without taxation, and also have the ability to
remove gains tax-free by taking a loan off the policy.
The whole life policy pays a dividend which is not taxed.
Dividend can be used in the form of reinvestment in the cash
value of the policy, or to purchase additional, paid up insurance.
Also can be utilized to buy more life insurance, provide a
bigger death benefit and earn interest.
The policy holder can take a loan from Whole Life Insurance
and to pay interest to the insurance company on this loan, but the loan rates
are very competitive with regular bank rates on home equity lines.
The loan balance can be repaid at the time of death by
deducting it from the death benefit
Potential for tax free income
It is true a long term investment, your relationship with the
insurance company will literally last a lifetime.
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