Whole Life Insurance
Candlefocus EditorWhole life insurance provides the policy owner with both coverage and a savings component, allowing them to save money over time without paying financial advisor or management fees. The cash value of whole life insurance typically earns a fixed rate of interest, often higher than traditional bank accounts. Policy owners may also borrow from their policy’s cash value, and use the funds for a variety of purposes.
However, an outstanding loan principal and interest will reduce death benefits, and the funds borrowed may be subject to income tax if not repaid in a timely manner. It is also important to note that whole life policies may not cover costs due to certain illnesses or accidents, so it is recommended that policy owners take additional steps to ensure financial security in their golden years.
Whole life insurance is a great tool for providing financial security for yourself, your beneficiaries, and your estate. In order to make the most of it, policy owners should research and understand fully their policy,any fees associated with it, and the tax consequences of borrowing funds from the cash value. Doing so is the best way to ensure that you and your loved ones will benefit from the protection and savings of whole life insurance.