Whole Life

What does Whole Life Insurance cover?

Whole life insurance is the most common type of permanent life insurance, also known as traditional life insurance. With whole life insurance a death benefit is paid to a policyholder’s beneficiary.

Your whole life insurance rates are determined by your age, medical history, and coverage goals. These factors allow us to create a plan that suits your needs best. Once decided, the premiums are fixed throughout your plan and the death benefit is certain. Some insurance companies allow you to make payments monthly, quarterly, or biannually.

Next, a portion of your premiums is usually put into an investment account to grow throughout the life of the plan. When the plan ends, the accrued cash value of the plan will be paid out to the beneficiary. If you name your beneficiary as an irrevocable life insurance trust, you may lower the tax liability. You can also broaden the number of beneficiaries on your policy.

Benefits of Whole Life Insurance

There are specific benefits to having a whole life insurance plan. At Aflac, we offer no-medical exam whole life insurance. Here are a few key reasons to choose this type of permanent coverage:

• Premiums are consistent, unless you want to raise the cash value of your plan.
• The death benefit will be paid to the beneficiary when the coverage ends.
• Your policy builds cash at a constant rate, tax-free in a secure account.
• You do not need to choose a term length – your life insurance coverage lasts your whole life.
• You may be able to access the cash value of your plan before it expires.

Whole Life Insurance Cash Value

There are a handful of whole life insurance tax benefits that make this path appealing. Part of your premiums go into an account that accumulates over time, tax-free – otherwise known as the cash value. One of the main tax advantages of a whole life insurance plan is that your cash value can grow at a faster pace since there aren't any fees being taken out.

You are also able to tap into these savings in an emergency through a loan or partial withdrawal. This can be especially helpful if you withdraw any funds post-retirement because you’ll likely be in a lower tax bracket by then.

Give us a call (914) 693-3500 to learn how we can protect what you value most!

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