Whole Life Insurance is exactly what it sounds like, a Permanent Insurance policy for your entire life. You and your beneficiaries will be in a permanent financial safety net till the day you pass away, or the term ends. It comes with a fixed premium, which means you won’t have to worry about variable rates now and then. Also, when it isn’t likely that you would opt to renew for another term. You see, for this type of plan, the term ends after 90 or 100 years. However, these shouldn’t be the only reason why you should opt for Whole Life Insurance. That’s why, to give you a clear understanding of what are the additional benefits that come with this policy, we have made a list below. Have a look.
The Cash Value:
Similar to permanent life insurance policies, whole life insurance also comes with a cash component which only accumulates over time. It is guaranteed to grow at a particular rate and can be used as an investment vehicle. Additionally, this component is also tax-sheltered throughout its lifetime.
You can withdraw the cash component at any time and can use it in:
- Paying premiums
- Purchase additional coverage
- Use it for emergencies
- Provide a tax-free loan
However, you will have to keep in mind that it will deduct the loan amount from the death benefits if you borrow against the cash value and then pass away.
Let’s talk dividends:
If you’ve opted for a dividend-paying whole life insurance policy, there is a chance of a dividend cash-out in case the insurer performs better than expected. As a policyholder, you will be able to participate in the company’s profits after they have paid all death benefits and other business expenses.
No medical exams:
Generally, medical exams are not a component of life insurance policies, but they are always in the underwriting. However, choosing a guaranteed acceptance whole life insurance means you will have the option to skip detailed health questions and the medical exam.
Complete life coverage:
To reiterate, with whole life insurance, you get a policy for the entirety of your life. You can add your family member or any dear one as your beneficiary, and as long as you can pay the premium, you will reap the policy’s benefits.
These are to name a few; however, if you’re still not convinced about whether you should apply for this policy, contact Harpreet Puri. She’s an experienced insurance broker and can help you with your queries.
When Is Whole Life Insurance a Good Investment Strategy?
Under whole life insurance first
Well, before we get into the nitty-gritty of the matter, you have to understand what whole life insurance is. Often also referred to as permanent life insurance, this type of insurance is exactly what it says. The policy offers insurance coverage till you the day you die given that you keep on paying the monthly premiums.
A major feature of a whole life insurance plan is, there is a cash component value to it. If after some years you are not able to pay the premium amounts, the premiums that you have paid would be used to pay the monthly premium amount. This saves you from the headache of losing your insurance coverage.
Coming to the benefits, whole life insurance has a whole list of them. Some are mentioned below:
- You will have guaranteed return on the money
- The premium rates are fixed
- The cash value that builds up when you pay your premiums can be withdrawn before
You can find out more about whole life insurance by getting in touch with Canadian LIC.
When does whole life insurance make sense?
Applying for whole life insurance sometimes can be an expensive option as you will have to pay the premiums throughout your life. However, in some instances, whole life insurance can be beneficial.
- If you have a child with special needs, taking up whole life insurance will ensure that he or she will have plenty of financial resources throughout life no matter what.
- If you have millions of dollars in estate taxes, then you can use whole life insurance to preserve money when it’s passed on to your family members.
- If all your tax-sheltered accounts have maxed out, and you still want to save more for your retirement, then a whole life insurance policy can be used as a saving vehicle. It has a cash component that will only build up over the course of time.
In the mentioned scenarios, whole life insurance may look like a good option but we advise you to get in touch with financial advisors for a better decision based on your requirements. Contact Canadian LIC and schedule an appointment today.
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The above information is only meant to be informative. It comes from Canadian LIC’s own opinions, which can change at any time. This material is not meant to be financial or legal advice, and it should not be interpreted as such. If someone decides to act on the information on this page, Canadian LIC is not responsible for what happens. Every attempt is made to provide accurate and up-to-date information on Canadian LIC. Some of the terms, conditions, limitations, exclusions, termination, and other parts of the policies mentioned above may not be included, which may be important to the policy choice. For full details, please refer to the actual policy documents. If there is any disagreement, the language in the actual policy documents will be used. All rights reserved.
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