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Whole Life Insurance

Having a life insurance plan may be more pressing than ever. According to the CDC, the average life expectancy is 78.7 years old. Having a plan in place can help protect your loved ones from the unforeseen difficulties that may arise if a main source of income is lost. A life insurance policy can provide added protection. Whole life insurance is a popular choice.

There are many ways to go about choosing a plan, but the first step is deciding if whole life insurance is right for you. Whole life insurance is worth it if you’re hoping to maximize your family’s financial gain. We encourage you to think about your dependents and how you can help provide peace of mind for your loved ones in the event of a loss.

What is Whole Life Insurance?

Whole life insurance is a permanent life plan that provides coverage throughout your entire life. The premiums tend to cost more than a term plan would, but getting this insurance plan may be beneficial in the long run.

The whole life insurance cash value usually ends up being high, but payments grow in a tax-deferred account at an established rate. The premiums won’t change over time and the death benefit is certain, regardless of the time frame. In this sense, the policy functions as an investment and the death benefit payout usually reflect this. Typically, the death benefit in a whole life insurance plan yields a large outcome.

At Aflac, we take the guesswork out of your decision. You can find comfort in knowing your premiums are fixed and your payout is guaranteed (subject to limitations and exclusions). To determine how much coverage you may need, try our whole life insurance calculator.

How Whole Life Insurance Works

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.

At Aflac, you can get a better idea of what your plan will look like by getting a whole life insurance quote. This helps make the process easier and quicker. Our whole life insurance plans are also portable, so you can take them with you to every new venture.

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.

This type of plan is popular for those who want to maximize the cash value for loved ones. The beneficiary shouldn’t have to pay any income taxes on the death benefit. We recommend you speak with a tax professional to see how you can lower your tax liability, regardless of the plan you choose.

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Whole Life Insurance Policy vs. Term Life Insurance Policy

This option makes sense to many, but some people are better suited for term life insurance. To assist your decision, we want to help you weigh out the term and whole life insurance costs and values.

Whole Life Insurance:

  • You receive coverage your entire lifetime.
  • Premiums are typically higher, maximizing your payout long-term.
  • The death benefit is guaranteed.
  • Part of your premiums will grow into a tax-deferred account.

Term Life Insurance:

  • You can choose a specific term length.
  • Premiums are typically lower, allowing you to save you money upfront.
  • If you outlive your term, you will not receive the death benefit.
  • You may be able to avoid high fees if you plan your term length wisely.

Typically, mature buyers choose whole life insurance to expand their financial portfolio. On the other hand, young families usually opt for term life insurance to save money in advance. Term life insurance is also popular among seniors mapping out their future.

Whole Life Insurance Quotes

Now that we have explored whole life insurance pros and cons, are you interested in taking the next step? The cost of this permanent coverage varies depending on your unique history and lifestyle. Chat with an Aflac agent today to curate your perfect plan and protect your loved ones.

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