Whole Life Insurance

Whole life insurance is a policy that covers the insured's whole life—hence the name—charging level premiums that accumulates a cash value that the insured can surrender, if they wish to terminate the policy, or borrow against, usually at lower interest rates than would be available elsewhere. Whole life insurance is also used in estate planning and business continuation plans, where term insurance would not be feasible. Unlike other insurance, the insurance company will eventually have to pay the benefit for a whole life policy, unless the insured cancels the policy or fails to pay the premiums.

Features of Whole Life Insurance

• Provides insurance coverage for life.
• The premiums will never increase.
• The death benefit is guaranteed, so you know exactly how much the policy will pay upon claim.
• Perfect for people who think long-term and wish to have a plan that is not subject to investment gains or losses.
• You can surrender the policy at any time in the future and the current cash value of the policy will be returned to you. These cash values are guaranteed.
• You can choose to pay premiums for the rest of your life, or for a set period of time (i.e. purchase the policy in a set number of payments). You can even purchase the policy in one single payment.
• The shorter the payment period the larger the discount you will receive.

Major Uses of Whole Life Insurance

• To create an estate (estate creation). The insurance coverage amount is typically greater than the cumulative amount you pay in premiums. This allows you to create wealth for the next generation through the use of life insurance.
• To pay taxes that occur automatically at the time of death, saving your estate from government tax erosion so your family can afford to keep the estate intact (estate preservation).
• Buy-sell agreements for business partners, where the partners take out insurance on each other to buy out the other partner's portion of the business in the event of one partner's death.
• Create a pension plan for your spouse while enjoying a greater income through Pension Maximization (see Details page for an explanation).
• Create a legacy by donating some or all of the insurance proceeds to the charity of your choice.