WHOLE LIFE INSURANCE

Like term life insurance, whole life insurance pays a fixed death benefit for a fixed premium amount. Generally, if the premium is paid on time, the policy will remain in force. But, unlike term life insurance which terminates at the end of the specific period, whole life insurance continues to cover the insured throughout his or her life.

In addition, whole life insurance has a cash value feature that is guaranteed. These cash values are accessible to the policyholder through policy loans for emergencies or other financial needs. Some whole life insurance policies may generate cash values greater than the guaranteed amount, depending on interest crediting rates and how the market performs.

Who should consider whole life insurance?

• People looking for guaranteed death benefits, guaranteed premiums and guaranteed cash value
• Those seeking fixed premium payments and not in need of premium flexibility

Key benefits:

• Offers guaranteed, predetermined death benefit with guaranteed cash values
• Policyholders can borrow money against the policy cash value. However, unpaid loans can affect the available death benefit and have certain tax implications if the policy is surrendered.
• Premiums are fixed and guaranteed not to increase

How it differs from other life insurance policies:

• Allows for cash value growth on a guaranteed basis
• The policyholder may elect to discontinue coverage and surrender the policy for the cash value, if any, or use existing cash value to purchase a policy with a lower death benefit amount that requires no additional premium payments.
• The policy may mature for its cash value at a specific time (e.g., age 95). Often the cash values are guaranteed to equal the policy death benefit at maturity.
• Provides for fixed premium payments throughout the life of the policy, although some policies offer options to pay a higher amount of premium for a shorter period of time.