Whole life insurance, also known as “pure life” insurance, and sometimes also known as “ennui life” or “continued life,” is an insurance policy that is guaranteed to stay in effect for the entire insured’s life, as long as requisite premiums are paid or to the agreed maturity date. Although most policies pay death benefits at the time of the policy holder’s death, life insurance policies may also pay dividends and other returns. Whole life insurance coverage can be quite risky because of its potential return on investment and its longevity. The main benefit of whole life insurance is the assurance of an income, long-term or short-term, during retirement.
Whole life insurance policies generally come in two forms: term and permanent. The former pays a specified death benefit during the policy holder’s lifetime; the latter guarantees a specified income level throughout the life of the policy. Whole life insurance may be purchased either from an agent or directly from a life insurance company. Many people prefer to purchase whole life insurance policies from an agent because they receive personalized service and better commission rates. Policyholders can also research policies online to find the best deals.
Whole life insurance policies are usually less expensive than other types of life insurance because they are guaranteed to pay at least a percentage, if not all, of the policyholder’s death benefit upon death. However, these policies may not cover dependents such as a spouse and children, and they may not provide cash savings or investment options. Whole life insurance policies are normally purchased from insurance companies that specialize in these policies. Some insurance companies sell a variety of life insurance products, while others may concentrate on whole life policies.
Whole life insurance policies have several benefits over other types of life insurance. First, the premium payments and death benefits remain constant, regardless of how much the insured pays into the policy. Thus, the death benefit grows as the policy amount does. The second benefit is that policyholders pay only one premium payment for the life of the policy, compared to paying several payments for various insurance policies.
It is important to understand that life insurance does not protect a family or individuals with a disability. It is designed to provide protection against a loss of life. Therefore, under most life insurance contracts, the beneficiary will be paid a specified amount. For example, in a $500 per month life insurance policy, the beneficiary will receive a specific sum of money upon the policy holder’s death.
In some life insurance contracts, cash value is designated as the benefit. With these types of policies, death benefits may be paid out only if the policyholder has survived a certain number of years. If the policyholder expires before reaching age 65, his death benefit will be paid out. Other types of life insurance policies pay out once a beneficiary is designated, but he must maintain his premiums and continue to pay them in order to keep his policy.
Whole life insurance policies are more expensive than term life insurance. The price of a whole life policy can range from tens of thousands of dollars to millions of dollars, depending on the policy, the age of the policyholder, the amount of coverage, and the health of the insured. These kinds of life insurance policies also offer the best returns. They offer high interest rates and dividends, and also tax deferred returns. Many people who purchase these kinds of policies find that they provide good financial protection and are useful in terms of planning for the future. However, there are some drawbacks to whole life insurance.
Whole life insurance policies also offer a number of restrictions. For example, many insurance companies suspend payments during the period in which the policyholder has a terminal illness. Death benefits and premiums can also be deducted from the insured’s estate. A whole life insurance plan can end up costing more money than a permanent life insurance plan because of these limitations.