Whole Life Assurance: Is this the Best Option for You?

Whole life assurance provides life insurance coverage for the entirety of one’s life. In most cases, it is a life insurance policy with a savings component. The life assurance policy has cash values that are tax deferred, have fixed premiums that are usually payable throughout the life of the policy and provides minimum guaranteed death benefits. As long as premiums are paid and the policy is not surrendered, the whole life assurance policy will continue to provide life coverage for the insured.

Who Needs Whole Life Assurance?

Whole life assurance is ideal for those who want to provide for loved ones during their lifetime. This may mean the need to provide insurance protection due to an aged spouse or to disabled dependents who cannot fend for themselves financially.

Whole life assurance is also useful as part of one’s estate planning program, since it can help provide for end of life expenses and to enable heirs to pay substantial inheritance taxes if your estate is large enough. In addition, whole life assurance has a built-in savings component that you can withdraw or take out a loan on when you are in need of cash.

Whole Life Assurance Premiums

For premiums, whole life assurance is more expensive than term insurance at the onset. However, in the long term, if you keep renewing your term life insurance policy, the premiums for the whole life policy will come out smaller. Whole life assurance is cheaper than endowment policies.

Types of Whole Life Assurance Products

  • Non-participating whole life assurance.

    The sum insured and the premiums are level for the entire duration of the policy. There are no dividends that are paid out to this policy.

  • Participating whole life assurance.

    This is similar to the product above except that these pay out dividends. The dividends are based on how well the company has performed investments-wise. The dividends may be left to grow within the policy, may be used to pay for premiums or to buy additional paid-up coverage so that you will have a higher sum insured. Dividends are not guaranteed. Only the death benefit will be guaranteed.

  • Indeterminate Premium Whole Life Insurance.

    Instead of level premiums, these charge varying premiums based on the “current” premium rating (Factors that determine this will be investment earnings, occupation, health conditions, etc.). This means that premiums will be low at the start and will increase through the years but the increases will be limited as there is a maximum guaranteed premium.

Other variations of the whole life involve how premiums are paid.

  • There are limited payment whole life assurance products that only require premium payments up to a specified number of years.
  • There are also single premium whole life assurance products where you get whole life coverage just by making one premium payment.

To protect your loved ones for less, fill the form on the right to get your life insurance quote.