People today are getting interested in applying whole of life insurance. This can be a great help to individuals in order to purchase an insurance that can be utilized as a preparation of something that might happen in the future. Before deciding on obtaining the insurance, one should understand what this insurance is all about.
Overview Of Whole Of Life Insurance
It is a form of insurance that offers coverage for a particular individual from the time he opens the policy until the death of the insured individual. The premiums that are paid on the policy insurance facilitate the build-up of its value. There are some policies that contain a maturity date wherein the policy may be paid out when the insured individual has not yet passed away at the particular time.
Basically the maturity date falls on the 100th birthday of the insured individual. The policy will be maintained throughout the insured individual’s life until its redemption. Listed below are some of the common characteristics about whole of life insurance:
- Cash value. This characteristic under this form of life insurance states that a certain part of the premium will be going towards establishing the cash value of the policy. Then, the policy will pay during the death or the 100th birthday of the insured person with that cash value. A lot of insurance policies provide the option of taking out loans against the cash value. This could be a great characteristic of individuals who are experiencing financial strains and those who need a little help. After which, they can repay the loans at a fair interest rate in order to restore the cash value of the policy. If there are instances that the loan remains unpaid, the loan amount including the interest will be revealed of the payoff amount once the insured individual dies. The remaining balance will then be distributed to the beneficiaries of the policy.
- Steady premiums. This is another characteristic of whole life insurance wherein the applicants can obtain steady premiums at the length of the term. However, those who want to renew the policy once the term expires. With term life insurance, insured individuals will deal with the significant increase of the amount of premium levels imposed by the insurance company. Nevertheless, with whole of life insurance, insured individuals will continue to pay the same amount of premiums from the time they take out their policies until their respective deaths. Although the figures of money could be a bit large at first, the premium will eventually become affordable in the long run since the prices of other commodities also continue to increase.
- Tax benefits. This is one of the significant characteristics of whole life insurance to the insured individuals and its beneficiaries. The insured individuals will not be paying additional taxes on the accumulating cash value of the insurance policy. When the insured individual dies, their beneficiaries will receive the insurance policy proceeds without gaining income taxes in most of the circumstances.
These are just some of the best characteristics that this particular insurance provides to its clients. It is a known fact that whole of life policies will comprise the majority of the insurance policies sold in different countries worldwide.