How does whole life insurance work?

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.

Whole Life Insurance

Having whole life insurance in place can help protect your loved ones from the unforeseen difficulties that may arise if a main source of income is lost. This type of plan can provide lifelong coverage, as long as premiums are paid. Aflac offers whole life insurance for individuals that can give you the peace of mind you and your loved ones deserve. Read on to learn what whole life insurance is, how it works, and the advantages it offers.

4 Min Read

Table of Contents

Key Takeaways

Whole life insurance offers permanent coverage, fixed premiums, a guaranteed death benefit, and a cash value component.
Compared to term life insurance, whole life insurance typically has higher premiums but greater long-term value, making this type of policy ideal for individuals seeking lifelong protection.
Aflac’s whole life insurance for individuals and families offers comprehensive coverage, with premiums that fit most budgets.

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 those for term life insurance, but getting a whole life policy may be beneficial in the long run. Your premiums won’t change over time and the death benefit is certain, regardless of the time frame. Additionally, a portion of your whole life insurance premiums goes toward your cash value, which is an account that accumulates over time on a tax-deferred basis.

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).

How Whole Life Insurance Works

Here’s a closer look at how whole life insurance works and what you can expect throughout the life of your policy:

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 a cash value 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

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. We recommend speaking with an Aflac agent to learn more about how your policy’s cash value works and the options available for accessing it during your lifetime.

Peace of mind doesn't have to break the bank

Don’t wait until it’s too late. Help cover yourself and your family with coverage from Aflac.

Get Started

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.

hide

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 find your plan to help protect your loved ones.

Get Started