Let’s Talk Whole Life Insurance
Life insurance can be confusing to shop for. Therefore, it is crucial to understand the differences between whole life and term life insurance to make the best decision for you and your family.
The Cost of a Whole Life Insurance Policy
Whole life insurance costs more than term life insurance, but it never expires; it lasts throughout your “whole life” so long as you pay your premiums. It also builds cash value. To decide which type of insurance you should purchase, you should consider what you need from your life insurance policy.
Final Insurance (also known as Burial or Funeral Insurance)
If you just want to cover your final expenses, a specific type of whole life insurance called final insurance (also known as burial or funeral insurance) may be the best option for you. This only covers your final expenses, so it is best to look at other options if you need more coverage.
Your whole life policy will accumulate cash value as you pay your premiums. You can often withdraw from this cash value as a policy loan or apply it toward your policy premiums. If you have unpaid policy loans at the time of your death, they will be subtracted from the death benefit. And, should you decide to surrender the policy, you can take the cash value of it.
The Cost of Policy Premiums
Unlike a term life policy that increases premiums with each term, a whole life policy’s premium is locked in for the life of the policy. As you age, whole life policies become more expensive to buy and harder to qualify for, so it is a good idea to get one when you are young and healthy. And most whole life policies don’t require a medical exam. Instead, they ask you some health questions. Because you don’t need to re-qualify at the end of a term, even if a new health issue arises, your premiums will stay the same.
How Much Coverage Can I Get with My Whole Life Policy?
The amount of coverage you can get will vary depending on what you are willing to spend and the qualification requirements of the policy. The independent insurance agents at Hermann Insurance can help you navigate the process of deciding which policy is best for you. Contact us today!