Whole life insurance (permanent life insurance) is the oldest form of life insurance. Whole life insurance has been around for approximately 30 years. If a person lives to age 100 and he or she has a whole life insurance insurance policy, the whole life policy matures. Instead of their beneficiary(ies) receiving the death benefit, ??the individual will receive the face amount.
Whole life insurance has many advantages over term and universal life insurance. ??Whole life has a constant payment ??(Premiums / payments never change). The amount of coverage never changes. Cash Value builds faster than Universal Life Insurance. It can end up costing less than term or universal life insurance if one lives longer than electing to get term universal life insurance and having to restructure your term policy(ies) numerous times in your life. In some cases people that get term end up not being able to get another cheap term policy due to health reasons. Their cost of life insurance then increases so much that the cost is much greater than either a universal life insurance or a whole life insurance policy.
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What it does
It pays a death benefit to the beneficiary you name and offers you a low risk cash value account and tax-deferred cash accumulation.
It provides a fixed premium which can’t increase during your lifetime as long as you continue to pay the planned amount.
It allows the insurance company to exclusively manage the cash value account in your policy.
It provides you the option to receive dividends from your policy or apply them to reduce payments.
It offers you the right to withdraw cash from the cash value of the life insurance policy during your lifetime.
What it doesn’t do
It doesn’t offer the account flexibility to invest in separate accounts such as money market, stock, and bond funds.
It doesn’t allow you the account flexibility to split your money among different accounts or to move your money between accounts.
It doesn’t offer premium flexibility.