Benefits of Whole Term Life Insurance: Reasons to Consider Whole Life Insurance Coverage

Deciding whether to opt for whole term life insurance or level term life insurance is fundamentally important to the protection of the financial interests of a family. Whilst term insurance is more affordable, a whole life policy offers the insured a lot more than just coverage in the event of death. Each monthly whole life insurance premium covers two different areas. Part of the premium goes towards covering the risk of mortality and the remainder is invested in bonds and equities by the insurer.

Whole Term Life Insurance Coverage Until Death

A whole life insurance policy will provide a lump sum payment to the estate, or nominated beneficiary, regardless of when that person dies. It doesn’t matter if that person passes away at 21 or 101, the policy is guaranteed to pay out. Whilst the cost of coverage will increase with age, these are funded from a separate investment pool formed by the earlier premiums.

Whole Life Insurance Has a Cash-in Value

As already alluded to, a percentage of each premium is invested in a separate investment pool for the future. Whilst this is used to pay for whole term life insurance coverage as the insured advances in years, unlike level term life insurance, it also has a cash-in value. Whilst it is inadvisable to use it as an investment, a whole life policy does have a value that could help in the event of a financial emergency.

Permanent Life Insurance Helps with Tax Planning

After advice from a financial consultant, many individuals pay into a whole term life insurance policy in order to move money from their own estate to a nominated beneficiary. This can be a fundamentally important facet of inheritance tax planning, especially for those with valuable property and investments. The sooner premiums are paid into a whole life policy, the less they’ll cost that person.

A Whole Life Policy Has a Guaranteed Premium

The premium for permanent life insurance coverage is guaranteed for at least the first ten years. Whilst it will rarely change, the lender requires this flexibility to amend the premium in the event of a change to mortality rates. This means that the insured enjoys a degree of certainty in terms of how much money is needed each month to provide the chosen level of coverage. In the event of a shortage of disposable income, the policy can also be canceled at any time and the investment can be cashed-in.