What Are The Advantages of Whole Life Insurance?
One Fixed Asset You Should Own
Whole life insurance, also known as permanent life insurance, has many advantages, including:
- Guaranteed death benefit: Whole life insurance provides a guaranteed death benefit protection for your entire life. The death benefit is distributed free of federal income taxes.
- Cash value: A portion of each premium payment is added to your policy's cash value, which accumulates slower in the early years of the policy. This cash value grows tax-deferred.
- Fixed premiums: Whole life insurance premiums remain the same throughout the policy tenure.
- Tax advantages: Whole life insurance can provide tax advantages that can help offset the impact of inflation.
- Potential dividends: Participating whole life policies offer the opportunity to earn dividends, which can provide an enhanced death benefit and cash value growth.
- Lifetime coverage: Whole life insurance offers lifetime protection to its holder.
- Lower premiums: Whole life insurance has lower premiums than permanent life insurance.
- Cash value growth: Whole life insurance offers a fixed rate for cash value growth.