Whole life policies are for clients that want a level premium with a level amount of death benefit to age 100. These policies build cash value and also allow loans from the cash value for emergency needs of the client. Premiums are higher than a term policy but, there are more options available for a lifetime of use. These policies offer loans from the cash value, reduced paid up death certificates, extended paid up coverage based on cash values, and mature at age 100. The benefits are level and the premiums are level for the life of the policy. Underwriting on these policies is normally less restrictive than for term life.
Whole Life policies can be issued as Guaranteed Issue, meaning that NO HEALTH questions are asked for the policy to be issued. These will have a graded benefit or waiting period before full value of the death benefit occurs.
A good fact to remember when considering between Whole Life versus Term Life is the a very small percentage of Term Life policies ever pay out a death benefit. Most term life policies are cancelled by clients before death occurs. Whole life policies are normally kept because the premiums never increase and most either pay the death benefit or return the cash benefit to the insured at some point.
Whole life policies have various options of premium payment plans. They can be Single premium, Paid up in 3 years, 5 years, 10 years and 20 years or continuous pay (meaning premiums are paid for the life of the insured.) Many people purchase SINGLE PREMIUM whole life as part of an estate plan that would offer heirs much more in TAX FREE cash without probate problems than if they left cash accounts as part of an estate. These also increase the amount of benefit over simply leaving cash to heirs.
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