5 Benefits of Whole Life Insurance
When most people think about life insurance, they picture a safety net, a way to protect loved ones if the unexpected happens. But whole life insurance offers more than just peace of mind. It’s a long-term financial protection that can support your goals, provide stability and even help you build savings over time.
Understanding the benefits of whole life can help you make a confident, informed decision when choosing which type of insurance policy is right for you.
Types of whole life insurance
At Amica, we offer a variety of premium plans – with coverage ranging from $25,000 to $1 million or more – so you can find a whole life policy that works with your budget. You can also select among several payment options to find the right policy for you.
Here are three of our whole life insurance policies and an overview of how they work:
- Whole Life 20: You pay premium payments for just 20 years. Then, your policy is guaranteed to last for the rest of your life. This policy is available for people up to age 80.
- Whole Life 65: You pay premium payments up until age 65, which is when many people near retirement. After this point, your coverage is guaranteed to last a lifetime. This policy is available for people up to age 50.
- Whole Life 100: You pay premium payments until age 100, which for most people, is their whole life. That said, your premium payments are lower, and you’re guaranteed lifetime coverage. This policy is available for people up to age 80.
In addition, all three of Amica’s whole life insurance policies offer a Terminal Illness Accelerated Death Benefit at no additional cost. This benefit allows you to collect a portion of your payouts if you’re diagnosed with a terminal illness with a life expectancy of 12 months or less.
Careful planning now can protect your loved ones for years to come. Families can truly benefit from the protection offered by whole life insurance or another Amica life insurance policy.
Whole life insurance vs. term life insurance
How does whole life insurance stack up against term life insurance? Let’s explore the pros and cons of each.
To put it simply, term life insurance is a lower-cost policy that offers protection for a set period of time. Term life insurance policies provide coverage for the length of the term; whole life insurance policies provide coverage for the lifetime of the insured. The coverage for whole life insurance does not end as long as premiums are paid. Amica’s term life insurance policies last 10, 15, 20, 25 or 30 years.
Here’s a quick breakdown of whole life vs. term life insurance policies:
Key advantages of a whole life policy
1. Lifelong coverage you can rely on
One of the most reassuring aspects of whole life insurance is its permanence. As long as you continue to pay your premiums, your coverage doesn’t expire. Unlike term life insurance, which only covers you for a set number of years, whole life insurance is designed to last your entire life. This means your beneficiaries are guaranteed a death benefit whenever you pass away, providing lasting financial protection for your family.
2. Predictable premiums that stay the same
Budgeting for the future is easier when you know what to expect. With whole life insurance, your premiums are locked in for life, which means the amount you pay each month will never increase, even as you age or if your health changes.
Unlike term policies, which may become unaffordable upon renewal, with whole life you don’t have to worry about rising costs down the road. This predictability makes it easier to plan your finances through every stage of life, from starting a family to entering retirement.
3. Guaranteed cash value growth over time
Whole life insurance policies accumulate cash value – a portion of your premium payments that grows over time. This cash value grows on a tax-deferred basis, meaning you won’t owe taxes on the earnings as they accumulate. Over the years, this can become a significant asset, providing you with a financial cushion for emergencies, opportunities or retirement planning.
4. Flexible access to funds when needed
Life is full of surprises, some joyful and some challenging. One of the most practical whole life insurance benefits is the ability to borrow against your policy’s cash value.
Need help paying for college tuition? Facing unexpected medical bills? Planning a major home repair? You can take out a policy loan to cover these expenses, often with lower interest rates than traditional loans.
And here’s the best part: These loans are tax-free, as long as they’re repaid. That gives you flexibility without the stress of penalties or complicated paperwork. But remember, it’s important to borrow responsibly, any outstanding loan balance will be deducted from your death benefit if not repaid.
5. Support for long-term financial goals
Whole life insurance is more than just coverage, it’s a planning tool. Many people use their policies as part of a broader financial strategy.
Here are a few ways it can support your long-term goals:
- Supplementing retirement income: You can access your cash value to help cover expenses in retirement, especially if other income sources are limited.
- Creating a financial legacy: The death benefit can help your children or grandchildren with education, homeownership or starting a business.
- Estate planning: Whole life insurance can help cover estate taxes or provide liquidity to your heirs.
Is whole life insurance right for you?
Whole life insurance can be a great option for those who like to stay ahead when it comes to their finances. With guaranteed coverage, fixed premiums, and cash value that grows over time, the advantages of whole life policy go far beyond what most expect from life insurance. If you're thinking about long-term security, financial stability and leaving a legacy, whole life insurance can help you check all those boxes.
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ALIC10725 Jun-27