Permanent insurance, including Whole Life Insurance, Universal Life Insurance and Variable Universal Life Insurance, can provide protection for your clients’ entire lifetime, or in certain instances up to a specific age—at which point they pay the policy owner the cash value. Permanent life insurance policies can build a cash value—money that your client can borrow against and in some instances, withdraw to help meet future goals, such as paying for a child’s college education.
Features of Whole Life
- Premiums generally are level and payable for life — Since premiums are level, the younger the client is when they purchase a whole life policy, the less expensive the annual premiums will be.
- Dividends — Whole life insurance policies can earn dividends. Dividends result when the actual life insurance costs turn out to be less than assumed in setting the premiums. When this happens, a carrier may return a portion of the life insurance premium as a dividend. Dividends are not guaranteed, since the actual costs are unknown in advance.
- Guaranteed Cash Values — Unlike term life insurance, which does not accumulate any cash values, some of the money paid into a whole life policy accumulates as guaranteed cash values. If the client choses to surrender the policy, these guaranteed cash values would be available to them. Or, as long as the policy is in force, they can borrow against them as a policy loan at the current policy loan interest rate.
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