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Whole Life Insurance (Full Detailed Guide 2020)

This life insurance policy protects you for your entire life as long as you live, because of that life insurance for seniors prefer this policy.

Here is what happens, you pay your insurance company premiums for that specific time period. The amount of premiums depends on a number of factors like age, gender, health, lifestyle, etc. When you pass away, the insurance company pays your beneficiaries a death benefit. The amount of death benefit is determined by the insurance policy you buy. 

Whole insurance policy is a type of life insurance policy. It covers you your entire life, provided you pay your premiums. Whole life policies never expire, and the amount of premiums never changes, regardless of your health. But you may need to take a health exam to qualify for a policy, and it is very expensive. 

Whole insurance policies also offer the advantage of a cash value component. Cash value comes from the premiums you pay. Part of that amount goes to a separate account where it grows tax-deferred. This account also serves as a savings account. You have the option of withdrawing from this account during your lifetime. But keep in mind that cash value takes a very long time to grow, decades mostly.

Even though you can withdraw from the cash value, the withdrawal amount may be limited depending on what you want to use it for and your insurance company’s policies. If you borrow over a certain amount, you will have to pay tax. It is important that you only borrow what you can return because if you are unable to pay back, your policy may lapse, be canceled, or you may end up paying more money. If you pass away without paying back, the insurance policy company deducts the amount borrowed from the death benefit paid to your beneficiaries. On your death, the insurance company only pays your beneficiaries the death benefit and keeps the cash value. Whole life insurance is best for seniors over 80.

whole vs term life insurance

What are the different types of whole life insurance?

Whole life has different types, and this section will discuss each briefly. 

Burial Life Insurance

Burial insurance policies in United States are designed to take care of your end of life expenses. These expenses may include debt, unpaid bills, funeral and burial costs, mortgages, etc. Burial insurance is also referred to as funeral or final expense insurance. This insurance usually does not require a health exam as it is designed for clients who may have serious health problems. 

Guaranteed Life Insurance

Guaranteed life insurance policies are designed for people who may not qualify for other policies due to severe health issues. You get instant coverage without needing to take a health exam or answer health questions. Guaranteed life insurance charges higher premiums and comes with a graded benefit plan. This means that if you pass away during the first two or three years, depending on your insurance company, your beneficiaries will not receive the full death benefit.

Universal Life Insurance

Universal life insurance policies offer the advantage of flexible premiums and adjustable death benefits. If you pay for your premiums using your cash value, you may have to pay higher premiums, later on, to make up for the cash value amount you used.

Variable Universal Life Insurance

Variable universal life insurance policies come with a savings account for investing your cash value. But is has bigger risks associated with it, e.g., in the years when the market isn’t doing well, your cash value may go down to zero, and you may have to pay higher premiums to make up for it.  

Indexed Universal Life Insurance

Indexed universal life insurance policies allow flexible premiums along with potential earning. These policies tie your cash value to a predetermined stock index.

Best Whole Life  Companies

This section will be briefly elaborating on some of the whole life  policies available with different insurance companies.

MassMutual

With an A++ rating from A.M. Best, an AA+ from Standard & Poor’s, and an Aa2 from Moody’s, MassMutual is one of the biggest insurance providers in the United States. 

They offer whole life , universal life, and variable universal life insurance. Their simplified whole life insurance policy is available to clients between the ages of 40 and 80 and offers a death benefit between $2,000 and $25,000. Their universal life policy offers between $50,000 and $100,000 in coverage. They also have a guaranteed life insurance option for seniors between the ages of 50 and 75

Guardian Life Insurance

Guardian Life offers whole life policies to people with HIV. They also offer survivorship insurance policies. You can also earn dividends with their whole life policies. Guardian Life offers several insurance riders, including waiver of premium, enhanced accelerated death benefit, guaranteed insurability, and the accidental death benefit.

Mutual of Omaha

Mutual of Omaha provides whole life insurance policies for adults and children. You can qualify for up to $40,000 through a simple application. They also provide a guaranteed life insurance policy that offers between $2,000 and $25,000 in coverage and is available to customers between the ages of 45 and 85. This age limit is 50 to 75 in New York.

New York Life

New York Life has the highest financial ratings, an A++ from A.M. Best, an AAA from Fitch, Aaa from Moody’s and an AA+ from Standard & Poors. New York Life’s whole life policies offer the potential to earn dividends. They have three different kinds of whole life policies.

Standard Whole Life

This is a regular whole life policy available to people below 90 and offers between $25,000 and $100,000 in coverage. 

Value Whole Life 

This policy allows you to pay lower premiums for a lower return of cash value.

Custom Whole Life

This policy allows you to adjust the time over which you want to pay your insurance premiums. This policy is available to clients below 70 and offers a minimum death benefit of $50,000. 

Northwestern Mutual

Whole life policies from Northwestern offer the potential to earn dividends.

Penn Mutual 

Whole insurance policies from Penn Mutual offer the potential to earn dividends. They offer riders and survivor ship policies. 

State Farm Life

Insurance type policies from State Farm offer the potential to earn dividends. They offer guaranteed life insurance policies to seniors citizen of United States between the ages of 50 and 80 with a death benefit of up to $10,000. 

Transamerica

Transamerica offers three different types of final expense insurance policies. Their whole life policy is available to clients under the age of 80. 

Immediate Solution

This is a standard final expense insurance policy that offers between $10,000 and $50,000 in coverage. 

10 Pay Solution

With this policy, you only pay your premiums for ten years. It has higher premiums and offers between $1,000 and $50,000 in coverage.

Easy Pay Solution

This policy has a limited payout during the first two years of the policy and offers between $1000 and $25,000 in coverage.

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