Whole Life Insurance
Few things in this world are more traumatic than the loss of a loved one. The pain of loss is often compounded by the expenses associated with funeral costs. Whole life coverage is a potential solution. While it won’t remove the pain of loss, it will help curb the financial sting.
There are several types of life protection available to you and your family. Term life insurance will only offer you coverage for a period of time at which time, the coverage terminates. Whole life coverage guarantees protection for the entire duration of your life time. Provided all the terms of the coverage have been satisfied. There are potential additional benefits to whole life coverage. When choosing a plan, there are participating and non-participating plan options.
Non-participating plans have a set premium with a set payout. Following the death of the policyholder, the insurance company will pay the agreed upon amount. In the event that the future costs of been underestimated and a gap exists between the amount paid in premiums and the policy amount, then the insurance provider accepts all risk and will pay the difference.
Participating plans deal with this issue in another manner. Similar to non-participating plans, premiums are set at a certain level. When the insurance company experiences excess profits, frequently called dividends, they return that to the policyholder. These dividends are not guaranteed, but they are tax exempt.
Different companies have different approaches to these two plans. The premiums charged depend upon the length of time the policy will be in effect. The longer the policy, the lower the premium. However, the largest difference between many providers is perhaps best illustrated by All State and MetLife. The vast majority of companies view the dividends as tax free income to be paid to your beneficiaries upon your death. MetLife has a unique program which allows you to access dividends while you are still living.
Dividends received from your whole life coverage will remain eligible to be accessed by you during your lifetime. They remain tax free during this time, allowing you to grow your wealth without having to pay income tax. The only caveat is that this money can only grow up to the level of your policy.
There are a number of options available for those wondering about the types of life protection available to them. Whole life coverage offers a unique opportunity for those to gain value from their investments. In effect turning their life protection plan into a sound investment for their future. If you have questions regarding whole life insurance, let Blue Sky Coverage help you find a policy that suitable for you and your family. Call us today to get free life insurance quotes.