Details of Whole Life Insurance Policies
Anyone who is interested in the purchase of life insurance should read all the details of a whole life insurance. Generally, term life insurances are preferred because they are cheaper. However, whole-life insurances should also be checked, although a decent term insurance will properly cover the needs of most individuals.
Guaranteed Death Benefit
In the case of a whole life insurance the death benefit remains level throughout the policy’s duration. This insurance also guarantees that there will be no increases in the premiums, which is a major feature. The insurance company cannot ever cancel the policy.
This insurance is in most cases a participating policy, meaning it will generate dividends for you. A dividend is declared by the life insurance company every year, offered to those who have a whole life insurance. The dividend can be cashed out (you’ll receive a check from the company), can be left there for earn interest or you can buy paid up additions, which are distinct premium polices (just as the one as your existing whole life insurance).
Cash Value Growth
This insurance includes cash values, which is at your disposal in case you need it at any given time. The policy can be terminated and cash out the accumulated cash or you can keep the policy by cashing it out as a loan. While you receive interest on the cash value of the policy, no taxes are paid on the interest. Taxes are paid when you cash it out. The loan also works on a tax free basis.
Waiver Of Premium Disability Rider
A waiver of premium rider can be added to the policy, meaning that in case you remain disabled, the premiums will be paid by the insurance company following six months of disability. Premiums will be paid regardless of the period you are disabled (including the rest of your life).
Accidental Death Benefit
An accidental death benefit can also be added to the whole life insurance. It states that the insurance company will pay the earnings double the amount you applied for with the life insurance.
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