Tag Archives: whole life insurance

Whole Life Insurance




In last week’s post, I talked about term life insurance and gave you a few of the basics to hopefully help you get started thinking about the type life insurance you need to purchase that suits your specific situation. As always, it’s best to meet with your local agent to discus the specifics of which life insurance is best for you.

This week, I’ll be giving you a little information on whole life insurance. Unlike term insurance, whole life is in force for the rest of your life as long as you pay your premiums.

This type of life insurance generally caters to long-term goals. It offers consumers guaranteed cash value accumulation with consistent premiums. It’s also known as “permanent” life insurance and has two parts: (1) a savings portion and (2) an insurance portion. You can also (after a period of time and you have accumulated a cash value) borrow or take a loan against the cash portion of your policy. One of the advantages of being able to borrow against your cash value is the interest rates are usually lower than the market interest rates.

The face value of the whole life policy is the amount of insurance you purchased and is the amount your beneficiaries will receive in the event of your death.  The cash value is the savings part of the policy. This is the part you can borrow against. You cannot borrow against the face value of the policy. Of course, to borrow against the policy, you need to have accumulated a certain amount of cash value through payment of your premiums over a period of time.

There is so much more to purchasing whole life insurance than I can mention in this post, but I hope this has given you enough information to at least be able to discuss it with your local agent. If you haven’t already, take a look at last week’s post on term insurance. These two blog posts should give you enough information to come up with a few questions to ask your agent when you meet.