Why Consider a Whole Life Insurance Policy?

Why Consider a Whole Life Insurance Policy?

There are many kinds of life insurance to be aware of. Today, we’ll focus on why a whole life insurance policy is worth considering.

A life insurance policy benefits everyone, whether you’re 18 and starting in the workforce, a college graduate with your first job fresh out of college, getting married or having children, or both. Either way, life insurance isn’t something to consider only when you become older or your health declines. You’ll see a few policy types as you learn about life insurance, such as term, universal, and whole life insurance. Today, we’ll focus on why a whole life insurance policy is worth considering. 

Whole Life Insurance Doesn’t Expire

One of the top advantages of this policy is that as long as you pay your premiums, your death benefit (the amount of money that an insurer will pay out to your beneficiaries) won’t expire. That’s the core difference between term and whole policies. Term life insurance policies only apply to a particular “term” or length of time. According to Policy Genius, a term life insurance plan only applies for 10-30 years. Some insurers might offer 40-year terms. Suppose you start paying premiums at age 38 and get a 30-year policy. At age 68, you’re still living, your coverage will end, and your beneficiaries won’t get the death benefit. 

Builds a Cash Value

This policy benefits you while you’re still living. A part of your premium goes toward the policy’s cash value (a savings component allowing policyholders to withdraw funds), accumulating over time. You can use or access it at any time for any reason. Some people use a whole life insurance policy as a part of their financial plan. A whole life policy is a simple form of permanent life insurance, and people often use permanent life insurance to grow generational wealth

Earns Dividends

In addition to a surefire way to grow cash value, many life insurance companies pay dividends. You can take dividends as cash or use them to pay some or all of your premiums. However, many people reinvest them in their policies to allow their death benefit and cash value to grow even quicker. 

Has Tax Advantages

A whole life insurance policy also has tax advantages. First, this life insurance plan has a tax-free death benefit. Secondly, you can borrow against your cash value to ride out a market downturn during retirement without paying taxes if you repay the loan properly. Additionally, the cash value and growth through dividends are tax-deferred (you’ll only owe taxes on the growth if you terminate your policy and take out the money). In other words, you can always take out the amount you paid in premiums without being taxed so long as the policy is still active. 

Malden Solutions Can Help You Find the Best Life Insurance Policy for You 

Understanding life insurance policies can be daunting. Fortunately, our insurance brokers are here to help explain different policies comprehensively and have your best interest at heart. We have you covered whether you’re a business owner looking for life insurance policies for your team or an individual who needs life insurance. Think of insurance brokers as free agents who want a customized plan that works for your business, lifestyle, and needs. 

Partner with Malden Solutions Today

Malden Solutions has a wealth of expertise in providing employer insurance solutions, HR solutions, and individual insurance solutions to businesses both big and small. Our team of seasoned professionals can help you navigate the rapidly-changing world of insurance with ease. We partner with businesses and individuals throughout the country to provide our dedicated services for employee benefits but also work within our surrounding communities in Maryland, Northern Virginia, and Washington, D.C. Contact us today to learn more about how we can provide effective, dynamic solutions for your business.  Stay connected with us on Twitter, Facebook, and Linkedin.

This entry was posted on Friday, February 24th, 2023 at 1:17 pm. Both comments and pings are currently closed.