Whole Life Insurance
Life insurance is an easy way to make sure your family will be financially protected if you, the breadwinner, pass away. There are different types of life insurance with different levels of coverage. Whole life insurance is one type that can be an essential tool in helping to secure your family’s future. Keep reading to learn more about it.
Whole Life Insurance Overview
Whole life is a type of permanent life insurance. It provides lifelong coverage, and most policies feature a savings component known as cash value. Usually, the premiums and death benefit stay the same for the policy’s duration. Whole life insurance policies have a guaranteed rate of return, meaning the cash value will earn a minimum amount of interest.
A whole life policy guarantees your family the death benefit. However, it’s typically much more expensive than term life. For a healthy applicant buying a $500,000 policy at age 40, the annual cost of whole life insurance is $5,728, compared to $315 for a 20-year term life policy.
Types of Permanent Life Insurance Policies
There are differences among the types of permanent life insurance policies.
- Whole life insurance – the most common type of permanent life insurance.
- Universal life insurance – offers greater flexibility than whole life.
- Variable universal life insurance – usually include many investment options that can help increase the cash value.
- Indexed universal life insurance – has no fixed interest rate on your cash value, which could lead to greater gains or losses.
Getting a Whole Life Insurance Policy
Step 1: Find an Agent You Can Trust.
While you can purchase a whole life policy through a company directly, there are many benefits to working with an experienced agent. A licensed broker will understand the market and know which companies are reputable, and he or she will be able to help you find the right coverage for your needs and budget.
An agent is also a good resource to have when you have specific questions, like whether your old life insurance policy can be converted. Getting an agent in the beginning can save you vast amounts of frustration and time over the long haul.
Step 2: Compare Plan Options.
There are several ways to compare options. If you have an agent, they can help you compare companies and premiums that are competitive in your area. You can also use third party websites to compare the best plans for your needs and demographic. One of the most reliable ways to compare options is to get quotes from different companies.
Step 3: Apply.
Depending on your situation, life insurance policies can sometimes be difficult to qualify for. You can apply online, over the phone, or in-person with an agent. You’ll need to put down the name of your first beneficiary and a second beneficiary just in case something happens to the first. You’ll also need to answer questions about your lifestyle and medical history. You might also have to undergo a physical exam to verify your health.
After that, you’ll schedule and complete a phone interview with a representative from the insurance company. They’ll ask you for clarification on some of your answers. Always be honest. The phone interview is confidential and takes 15 to 30 minutes.
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Life Insurance Made Simple
Deciding on a policy type, life insurance company, and coverage amount can be stressful. At InvoBH, we’re committed to making your experience hassle-free. Contact us to get help choosing the plan that works best for you and your family!