Whole Life Insurance

Whole life insurance pays out a set amount of cash to your beneficiaries after your death, known as a death benefit. The larger the policy you choose, the more money they will receive.

To keep your insurance policy active, you’ll make payments, called premiums, either monthly or yearly. As long as you keep paying these premiums, your policy will stay in effect for your entire life. Part of each premium will go toward an account, which grows with interest as long as your policy is active.

Riders are optional features that you can add to a life insurance policy for additional coverage. They vary by provider and can increase how much you pay for your coverage. If you choose a whole life insurance policy, we’ll help you explore the available riders and pick the best features for you. Some of the most common riders include:

• Accelerated death benefit rider: If you’re diagnosed with a life-threatening illness, this rider allows you to access your death benefit payout while you’re still living to cover your care expenses.
• Disability waiver of premium: This feature allows you to skip monthly premiums for certain reasons, like a major injury or serious illness, without losing your policy.
• Family income benefit rider: If you die suddenly, a family income benefit rider will provide a regular monthly income to your loved ones for a limited time.
• Long-term care rider: This rider covers the cost of long-term care medical expenses you may have that aren’t covered by your primary health insurance.

Universal and whole life insurance policies are both types of permanent life insurance. However, there are a few major differences:

• Flexibility: While whole life insurance premiums remain fixed over the policy’s lifetime, universal life insurance premiums are flexible. With universal life insurance, you can adjust your premiums whenever your financial situation changes.
• Interest: The interest paid on a whole life insurance policy is usually adjusted yearly. On the other hand, a universal policy’s interest rate fluctuates monthly. People with universal life insurance could see their cash values rise significantly if interest rates rise.

The right amount of coverage depends on your unique circumstances. To determine how much life insurance you need, start by asking yourself these questions:

• What do you need the policy to do? For example, do you only want to pay for your funeral, or are you hoping to pass on an inheritance to your children?
• How many beneficiaries will your policy cover?
• How large of a policy can you afford on your current income?
• Do you need to pay a mortgage, credit card debt, or any other debts?
• Do you have any other types of life insurance?
• How much money do you currently have in savings?

Like a savings account, whole life insurance is a way to save money your loved ones can use after your death while also earning interest. Whole life insurance usually offers higher, untaxed earnings than a savings account, however. You can also borrow from the policy over your lifetime, which is often more affordable than taking out a personal loan. For some people, though, a savings account can be a better choice since it doesn’t require you to pay monthly premiums. At eFinancial, we’ll help you consider your options and choose the best type of savings for your situation.