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WHOLE LIFE INSURANCE

Long-term insurance coverage without rising premiums

Whole life is ideally suited for long term insurance needs. A level premium is set at the beginning of the policy and does not increase over time.  Policies can be participating or not. Participating policies benefit when the insurer is profitable and additional dividends are credited to the policy values.

 

The insurer invests the additional fund values and your equity performance is dependent on their performance. You do not have the investment decisions like a universal life policy. Dividends can be used to purchase additional paid-up insurance also known as paid-up additions. In the future you can use dividends to pay the premium and keep the insurance in force.  This is called premium offset. 

 

You can withdraw, borrow and/or cash in a policy to access the equity of a whole life policy. Dividends can also be paid in cash.  This is the premium product for long term insurance coverage without rising premiums.

Whole Life Insurance — Pro's and Con's

PRO

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  • Ideally suited for long term insurance needs.

  • Premium does not increase over time.

  • You can choose to participate in insurer's profits or not.

  • If participating, dividends can be used to purchase additional paid up insurance or paid in cash.

  • You can withdraw, borrow and or cash in a policy to access the equity of a whole life policy.

  • Premium product for long term coverage without rising premiums.

CON

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  • Initially costly when compared to term insurance.

  • May not be affordable for your insurance needs.

  • Dividends and cash values can be small to non-existent in early years.

  • Should not be used as a first line investment fund.  It's insurance — and should be treated as such.

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