Whole Life Insurance Quotes
Get a Quote »Whole life insurance is permanent coverage that is designed to cover the insured for his or her entire life. Premiums are usually level until the policy is paid-up and the cash value builds up over time.
As oppose to term life policies that are temporary in nature, whole life coverage is more appropriate for those who wish to provide permanent coverage while building a reliable asset over time. We offer quotes, rates, and illustrations from several highly rated carriers.
Compare Whole Life Insurance Quotes
Several companies offer whole life policies through independent agents and agencies like ours. The most common types are traditional (level term), interest sensitive, and single premium.
We can illustrate all types as there can be some moving parts with each coverage. Illustrations can help the proposed insured decide which type will be most appropriate for them now and in the future.
- Traditional Level Term whole life is the most common. Premiums and death benefit amounts will be level while cash value will build during the life of the policy.
- Interest Sensitive coverage will have variable premiums depending on the performance of investments and economic conditions. These plans illustrate much like universal coverage.
- Single Premium or Limited Pay policies require one or more contributions in order to permanently fund the policy. These are sometimes referred to as modified endowment contracts (MECs) and are more investment-like in nature.
Advantages Of Whole Life Insurance
There are several advantages to permanent life coverage vs. term or universal. Consumers appreciate the fact that this coverage reduces income taxes, has the potential to build cash value, needs to be medically underwritten only once, provides flexibility, and can offer an accelerated death benefit in times of need.
When funded properly, a whole life policy will build up cash value over time. In this way, the policy pays a dividend to the insured and eventually the policy can be paid-up. It is a common misconception that premiums will be due for the life of the insured.
In many cases, the dividends generated will cover the premiums after the policy has been in-force for a period of time. It is also important to note that the cash value can be borrowed against by the insured should the need arise.
Many newer life policies also offer an accelerated death benefit. In a nutshell, the insured can access the entire death benefit if they are terminally ill or are in need of long term care. In some cases, these policies are referred to as hybrid LTC plans, but in others the accelerated rider is automatically included.
Tax Advantages of Permanent Whole Life Coverage
Whole life policies can reduce and/or avoid income and inheritance taxes at death.
The cash value grows on a tax deferred basis for the insured and at passing, the policy beneficiaries can collect the entire death benefit without owing income taxes to the I.R.S.
There are very few assets that offer the tax advantages of a whole life policy. This is why they are used by individuals and businesses so often for estate planning purposes. Income tax-free life plans can account for estate taxes and/or help with business succession planning.
Families might purchase a second-to-die policy as part of an irrevocable funeral trust (ILIT), while a business will purchase a key person plan in order to maintain stable business activities should a proprietor pass away. And almost all final expense policies sold and purchased are permanent in nature.
Permanent coverage also allows the insured to transfer the cash value to a paid-up policy through a 1035 tax free exchange. This cannot be done with a term policy as term policies have no cash value. Should the insured wish to keep their life coverage while also protecting its tax deferred status, then the entire cash value can be exchanged tax-free for a paid up policy. This will avoid future premium payments.
Guaranteed and Non-Guaranteed Coverage
Permanent insurance will usually illustrate two values; one that is guaranteed and one that is not. The guaranteed value will show growth by a fixed interest rate (say 3% for example) for the life of the policy. Think of this value as the minimum performance of the policy as guaranteed by the insurance company.
The non-guaranteed value is one that is usually based off the past investment and payout performance of the company (say 4% for example) and is the expected interest crediting amount going forward. While not guaranteed, most life carriers tend to credit interest at a higher rate than the minimum value.
Participating vs. Non-Participating Contracts
Life insurance policies may also be referred to as participating or non-participating. Participating contracts allow the insurance company to share the profits with the policyholders in the form of a refund or dividend. These are non-taxable distributions as they are considered an overcharge of premium by the I.R.S. Most policies sold today are participating.
Non-participating contracts typically do not pay dividends and the death benefit, premiums, and surrender values will not change during the life of the policy. The insurance company keeps any over-payments while also maintaining responsibility should claims be higher than expected.
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We work with the leading highly rated providers in order to illustrate dependable life insurance coverage for individuals, families and businesses. Contact us today!