Whole life is a type of life insurance that provides coverage for a lifetime, with a guaranteed benefit. Upon the death of the contract holder, the insurance pays out to the insured’s beneficiaries. The premiums are typically fixed, and will have the lowest premium when purchased at a young age. Cash value is cumulative. The cash value accounts for one of the key benefits of whole life insurance. While the cost of whole life insurance premiums are higher than term life premiums, whole life does not expire after the specified period, as term life insurance will. Contact a Box Insurance Agency agent, for detailed information on the different types of life insurance in Grapevine.
However, term life insurance lasts a specified period, typically 10, or 20 years, with the policy expiring at the end of the period. When the term is up, the policy can potentially be renewed, depending on your age and health, although generally at a higher premium.
Whole life insurance premiums, on the other hand, never increase. The policy is designed to last a lifetime, and as long as the premiums are paid, the policy will remain in force regardless of your age and health. Even if you become seriously ill, the rates will not increase. The premiums on whole life policies apply towards a cash value, as well as providing a death benefit; term life provides only a death benefit.
The cost of term life insurance policies, is only guaranteed until the end of the term. After the specified period, term policy premiums can be raised based on your age and health, and inflation. A Box insurance agent can provide detailed information regarding the various types of life insurance in Grapevine.
Cash Value, Taxes, Dividends, and Tax Advantages
In whole life insurance policies, the premiums paid contribute to the cash value, and the cash value earns interest, which is guaranteed by the insurance company. Furthermore, the cash value and death benefit never decrease, unless you withdraw the cash value from the policy, or stop paying the premiums.
Money invested into a 401K or a traditional IRA defers taxes, until you withdraw it during retirement. With a purchase of a whole life insurance policy, the premiums are paid with after-tax dollars. The cash value accumulates without taxation. In addition, some whole life insurance policies pay a tax-free dividend, although they are not guaranteed. Contact a Box Insurance Agency agent for additional tax information on life insurance in Grapevine.
Borrowing Against Cash Value
Money can be borrowed against the cash value of a whole life insurance policy. Interest is paid to the insurance company on this loan, but the loan is tax-free. The rates are competitive with bank rates on home equity loans. In some cases, the loan balance can be repaid at the time of death by deducting it from the death benefit. Contact a Box Insurance Agency agent today to discuss all the details, and additional advantages of purchasing life insurance in Grapevine.
Life insurance in Grapevine
Contact a Box Insurance Agency agent for additional information regarding life insurance in Grapevine. Our agents provide a personalized assessment of your insurance needs, and the information needed regarding whole life insurance. Our dedicated insurance agents serve Grapevine, Dallas, Fort Worth, and the surrounding areas. Give us a call today for free insurance quotes, and answers to your questions.