Learn More About Whole Life Insurance
Key Takeaways
Whole Life Insurance Covers You for Your Entire Lifetime
Unlike term life, which expires after a set number of years, whole life insurance stays in effect as long as you pay your premiums. Your beneficiaries receive a guaranteed death benefit whenever you pass away. Premiums are fixed at the start and never increase over the life of the policy.
Part of Your Premium Builds Cash Value You Can Access While Alive
A portion of each premium payment is invested and accumulates cash value over time. You can borrow against this cash value or access it during your lifetime. This makes whole life insurance both a protection tool and a financial asset, which is why it's also used in estate and trust planning.
It Costs More Than Term Life, but the Coverage Never Expires
Whole life premiums are higher because the policy is permanent and includes a cash value component. Your cost is based on your age, health, life expectancy, and lifestyle at the time of purchase. For those who want lifelong coverage and a built-in savings element, the higher premium reflects that added value.
What is whole life insurance?
Whole life insurance provides coverage for the life of the person that's insured on the policy. The amount paid is predetermined and will be paid when the insured dies. The premiums are set at the beginning of the policy and are consistent throughout. Part of the premiums may be invested and provide additional cash value. All premiums must be paid for the policy to stay in effect.
Who is covered by whole life insurance?
The recipient of amounts paid when an insured dies is called the beneficiary. Beneficiaries are named in the policy. In many cases, these are people that rely on the insured financially. A beneficiary can be natural person or a legal entity. Life insurance can also be used in estate and trust planning.
Why do you need whole life insurance?
Whole life insurance provides financial support for those that the insured leaves behind. Coverage can provide money to replace income that is lost due the insured's death. Amounts paid out under the policy could help pay debt, make purchases, or plan for future expenses.
What are the benefits of whole life insurance?
There are many benefits to a whole life insurance policy. Here are a few:
- Provides cash value over the life of the policy
- The cash portion can be accessed by the insured during their lifetime
- The insured may be able to take a loan out against the policy
- Made to last for the insured's lifetime
- Costs remain constant as long as the policy is paid
How much whole life insurance should you purchase?
As the insured, you can select a payout that meets your needs. The amount usually takes into account providing for someone after you are gone. If small children will be the beneficiaries, you may want an amount that would cover financial support for the number of years until they turn 18 or graduate from college.
Some other items to consider are:
- College expenses for children
- Mortgage on a house
- Outstanding debt (student loans, car notes, etc.)
- Funeral expenses
- Estate and trust planning
The GEICO Insurance Agency and our partners can help you get a policy that meets your needs. Get a life insurance quote online.
How much does whole life insurance cost?
The cost of a whole life policy is based on the amount of the death benefit and insured's:
- Age
- Health
- Life expectancy
- Other lifestyles hobbies, employment, etc.
Ready to Help Protect Your Loved Ones?
Life insurance could help provide financial support for the people who count on you.
