A whole life insurance explanation should be required reading for anyone about to purchase life insurance. Whole life, in my humble opinion, has in recent years got a bad rap. People tend to buy term life insurance because it is cheaper. Although I believe that a good term insurance can take care of the insurance needs of most people, a good whole life insurance policy is worth looking at.

Guaranteed Death Benefit

The death benefit of a whole life insurance policy is guaranteed to stay level for the duration of the policy. If you think about it, that means a lifetime. That type of guarantee cannot be sneezed at. The premiums of your whole life insurance policy is also guaranteed never to increase. This is also a very important feature. The policy can never be cancelled by the insurance company.

Cash Value Accumulation

A whole life insurance policy has cash values, that cash available to you,if you should need it, at any time. You can surrender your policy and get the cash that the policy has accumulated, or you can take the cash in the form of a loan and still keep your policy. The cash values of your policy accumulate tax-deferred, which means that while the cash is accumulating interest you pay no taxes on the interest. Whenever you take out the cash you pay the taxes then. You also borrow on a tax free basis.

Dividends

As most whole life insurance policies are participating policies you earn dividends on your policy. Each year the life insurance company declares a dividend, a portion of which goes to policy owners who own a whole life policy. You can take your dividend in cash, the company will send you a check each year, you can leave the dividend to accumulate interest, or you can elect to purchase paid up additions with your dividends. Paid up additions are single premium policies of the same type, that is whole life insurance.

Waiver Of Premium Disability Rider