Features of Whole Life Insurance
1. Lifetime Coverage Whole life insurance guarantees coverage for the insured's entire life, as long as premiums are paid according to the policy terms. This differs from term life insurance, which provides coverage for a specific period (e.g., 10, 20, or 30 years). 2. Fixed Premiums Premiums for whole life insurance policies are typically fixed and remain constant throughout the life of the policy. This predictability makes budgeting easier and protects against increases due to age or changes in health. 3. Cash Value Accumulation A significant feature of whole life insurance is its cash value component, which grows over time. Part of each premium payment goes into a cash value account, which accumulates on a tax-deferred basis. The cash value can be accessed through policy loans or withdrawals, providing liquidity and financial flexibility. Here’s how cash value accumulation works: Guaranteed Cash Value: Whole life policies typically have guaranteed minimum cash values tha...