Whole of Life Insurance, also known as Permanent Life Insurance, is a simple form of life insurance with a cash value that grows over time. As the name suggests, the policy remains in force for the entirety of your life, and only pays out at the time of the insured’s passing.
Unlike other forms of insurance with complicated investment schemes and premium options, Whole of Life Insurance is much simpler. Whole of Life Insurance has guaranteed and stable premiums for life, whereas premiums for other policies aren’t always fixed and rise from term to term or year to year. Whole of Life is a permanent insurance, so as long as premiums are paid the policy will remain in force. The death benefit for Whole of Life Insurance is also fixed and guaranteed, providing you a peace of mind knowing your family won’t be financially burdened.
Whole of Life Insurance consists of two main components: the cost of insurance (COI) amount, and the cash value (savings component). The cost of insurance is the minimum amount of premium required to keep the policy in force. Premiums collected in excess of the COI are accumulated as the cash value of the policy. Similarly to a savings account, the cash value within your policy will earn interest based on the current market rate or minimum interest rate.
As your cash value accumulates, you may access it – within guidelines – without affecting the overall death benefit, providing you with liquidity with your policy. In addition, if your circumstances change, you may leverage the policy and borrow against the accumulated cash value.
Whole of Life allows you to build guaranteed wealth while also protecting you and your loved ones.
Life insurance in general can be an important component of overall is a great wealth planning and estate management, but Whole of Life is particularly useful due to its simplicity and stability. Whole of Life offers the ease of budgeting with its guaranteed death benefit as well as fixed premiums, allowing you certainty with your future financial planning and future expenses. Additionally, your future expenses may even lower once you’ve accumulated enough cash value.
With most Whole of Life policies, once you’ve accumulated enough cash value in the policy – i.e. the policy is “paid up” – you can choose to fund the remaining premium payments from the policy itself. Conversely, you may let the cash value accumulate, and in your later years can use this to as a source of income to augment or replace other sources of income.
At INLE Risk Management we can help you choose the best Whole of Life policy from our partner insurers. In addition, we can help structure bespoke policies to fit your current and future needs.
