Permanent Life Insurance (Whole Life)

What is Whole Life insurance?

Whole Life is a form of life insurance that combines a guaranteed death benefit with a savings component called a cash value. This means that Whole Life will never lapse while you’re still alive, while simultaneously growing more valuable over time.

Benefits vs. Disadvantages

The beneficial features of a Whole Life plan include:

  • Guaranteed premiums that never increase.
  • Cash value component that increases over time.
  • Tax sheltered investment that never decreases in value despite downturns in the market.
  • Viewed as an asset by your bank or institution. 
  • Coverage for life that also provides your family with a tax free death benefit that will never decrease in value.
  • You can not outlive the benefits of a Whole Life policy.
  • Death Benefits are paid to the beneficiary without requirement to  probate.

The Disadvantages of this type of insurance are:

  • Cost of coverage is higher than Term Life insurance policies. Since permanent policies offer lifelong coverage, they come with a higher price tag. However, Whole Life typically costs five to ten times more than Term Life insurance initially. Term insurance will eventually exceed that cost and then in most cases expire before a claim is paid.
  • It can take a long time to build up cash value.
  • It’s not always the best investment choice. Depending on the market, the interest you earn on the cash value might be less than what you could get with other investments.

The cost of Whole Life insurance in Canada

The cost will depend on a number of factors including coverage amount, age, gender, smoking status, health, and morbidity at the time of purchase, initially, it can cost five to ten times more than a term policy.  

It is best to speak with an advisor to see if a Whole Life product is really the best option for your situation. Our Experior Financial Group associates have an education and experience in insurance products and can explain the details with you when you arrange a meeting with them.

Benefits of working with Experior Financial Group to get Whole Life insurance?

At Experior Financial Group our associates work hard to get you the Whole Life, Term, Universal, or Permanent Life Insurance that best suits your budget. We are not an insurance company but rather a Managing General Agency: Our Brokers work for you and will assess your needs and obligations to determine the correct solution for you and your family. We can recommend the right life insurance protection and many types of plans to meet your unique needs. We’ll ensure you get the coverage you need at a premium you can afford and work within your budget. Our insurance associate will review your policy history, previous life insurance plans, financial requirements and provide you with solutions to get you the best life insurance coverage available.

FAQ

While premium payments can be pricey, having a Whole Life policy can be one of the best investments you can make. Especially if you started a policy when you were young. Your beneficiary will be glad you did this when it comes time to review the financial situation that was left behind. A whole life policy provides guarantees that you can count on to be available when required.

This is best answered by your insurance agent. They will take a lot of factors into consideration including your age, the type of lifetime coverage or term coverage you are looking for, and how much coverage you need. The Experior insurance associate will assess your budget for affordability. 

Some insurance companies will just set you up with any standard policy, but at Experior Financial Group we work with our clients to create a financial needs analysis to ensure you get the products that suit your goals and needs while paying the lowest rates possible for your policy.

Whole Life policies are guaranteed to remain in force for your entire lifetime, provided required premiums are paid. Whole Life policies are guaranteed not to increase in premium and will remain in force for your entire lifetime provided required premiums are paid. Generally, premiums are paid lifetime except for limited pay policies that have a limited pay period of 10, 20 or to Age 65. 

Guaranteed Whole Life insurance plans have two primary features; level premiums for your entire life and a cash surrender value available if you cancel the policy.

A common use of Whole Life coverage is providing funeral insurance and final expenses coverage. A lump sum amount of cash is paid out to beneficiaries upon your death and may be used to pay funeral expenses and other final expenses. Benefits bypass probate and are paid tax free to the beneficiaries within a few days of claim.

It’s best to discuss this with your accountant and insurance agent but, Whole Life insurance policies can also be used to pass on your wealth to your beneficiaries in the most tax-efficient manner, saving on some of those taxes. Tax Free benefits are there to ensure that dependents don’t lose on their inheritance.

Whole Life policies accrue a cash value as part of the policy. This cash value can be withdrawn at any time and yes, you can be content and have security in knowing that your Whole Life insurance policy can be surrendered for its cash value.

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