Over half of the entire population of the United States have some form of life insurance policy. These policies are in place to take care of people’s loved ones after they move on.
There are several types of life insurance policies that you can take out, each of them has different advantages and caters to different circumstances. One of these policy types is a whole life insurance policy.
You might be wondering, ‘what is whole life insurance?’ Well, we’ve got you covered. Stick with this article to learn all about whole life insurance and its benefits.
- No Expiration
The first, and probably most important, benefit of whole life insurance policies is that they never expire. When you take out this type of policy, it is guaranteed to last for the duration of your life.
So long as you keep paying your premium, then your policy will never expire for as long as you’re alive. This is in contrast to fixed-term life insurance policies that only cover you for a specified amount of time.
- Premiums Don’t Change
During a whole life insurance policy, your premium will never change. Whatever quote you’re given when you first take out the policy is what you will continue to pay for the rest of your life.
You have to pay premiums on any kind of life insurance policy, but other policies will have flexible premiums that are liable to go up at any time. Take a look at some Paradigm Life policies to see the kinds of premiums you’ll be paying.
- There Are Tax Advantages
Did you know that there are also tax advantages to taking out a whole of life insurance policy?
The death benefit that your loved ones will receive from the policy is completely tax-free. As well as this, you can also borrow money against your cash value, and, as long as the loans are repaid fully, they will be exempt from taxation.
- Policies Can Earn Dividends
Many whole life insurance policies out there actually pay out dividends. You can either take these dividends as some extra cash for yourself, or you can reinvest them back into your policy.
Many people choose the latter option because it allows them to grow their death benefit and boost their cash value. You can use your dividends to pay for your premium.
- They Build Cash Value
Okay, cash value, this one is very important. In the simplest way possible, every time you pay your premium, your life insurance policy builds cash value.
This cash value builds very slowly at first, but the longer you’re with the policy, the more it continues to grow. If you’ve had a whole life policy for many years, then you’ll have quite a handy pot of money that you can access at any time.
A Whole Life Insurance Policy Is Part of a Sensible Financial Plan
There are so many advantages to taking out a whole life insurance policy. You can let your policy and cash value grow and be confident that your loved ones will be looked after in the unfortunate event of your passing. More than that, whole life insurance policies are a crucial part of a solid financial plan.
Looking for more great financial tips? Stick with us. Take a look through some more of our informative content today.