Most things in life come with an expiration date — from groceries to coupons and even certain types of life insurance. But there's one exception to that rule: a whole life insurance policy.
Whole life insurance covers you for as long as you live (as long as premiums are paid on time), at a locked-in rate that won't increase as you age or if your health status changes. It may also build "cash value" over time, which is money that gets set aside with each payment you make, like a nest egg for the future.
Ready to get started? Get a whole life insurance quote now, or read on to learn why whole life insurance may be just what you need.
Your predictable, fixed-rate payments can be made on a monthly, quarterly, semi-annual, or annual basis. Once you buy whole life insurance, the rate you pay is guaranteed to stay the same, even as you age or your health status changes.
Let's say you buy a life insurance policy during your working years. You'll get to keep that same policy and premium rate when you retire.
And, speaking of retirement, that's another reason why people buy a whole life policy. It can act as a way to set money aside for the future.
Economic Policy Institute, "The State of American Retirement"
Nearly half of working-age families in America haven't saved a single penny for retirement, according to the Economic Policy Institute.1
Luckily, some whole life insurance policies come with the added benefit of "cash value." With each payment you make toward your policy, a portion of it gets set aside for the future. Left alone, it will continue to grow — and can help to supplement retirement savings. Similar to qualified retirement plans, cash value also comes with tax advantages, as the money accumulates on a tax-deferred basis.
Some whole life insurance policies may also allow you to borrow money against the cash value of your policy, in some cases. Usually, this can be done without the waiting periods and credit checks typically required by other types of loans.
Just keep in mind that if you borrow against the cash value of your whole life insurance policy, you should consider repaying it as soon as possible. If you don't, your loved ones will have a reduced death benefit if you pass away, since unpaid loan balances are deducted.
No two people are exactly alike. As a result, you'll likely need a different coverage amount than your mother-in-law, neighbor or coffee shop barista. That's why whole life insurance policies typically allow you to choose from a list of options for your coverage amount.
To choose an amount, consider how much money your loved ones would need — both short and long-term. What immediate expenses would they need to cover if you passed away? And how much money would they need for the future?
If you have a child, you may want that amount to help cover them from diapers to diploma. Or, if you have a spouse, you may want that coverage to help carry them through retirement.
Let's figure out how much life insurance you may need. It will be based on information about you, your current financial situation and what your family might need in the event of your death.
There are two main types of whole life insurance plans offered through AIG Direct: Universal Life and Guaranteed Issue Whole Life Insurance.
Universal Life Insurance offers lifelong protection and the attractive flexibility to increase or decrease your coverage amount over time (subject to approval by the life insurance provider). You can choose your coverage amount — based on your needs and budget. That's ideal for those who might not need much coverage now, but who see a loving spouse, a happy child or a beloved parent needing their financial help in the future. You can also choose to pay a lower or higher amount for your policy, making it a good fit for those just starting out in life. Keep in mind, however, that the amount and timing of your payments on a Universal Life Insurance policy can affect how long you can continue coverage.
If you're 50 to 85 years old, there may be another type of whole life insurance to consider: Guaranteed Issue Whole Life Insurance (GIWL) Insurance. Like most whole life insurance policies, it can offer protection for up to a lifetime. But, unlike other whole life insurance policies, you don't have to take a medical exam or complete a long health questionnaire to qualify. As long as you meet the age requirements, you're guaranteed approval — regardless of your health status. Those who qualify may be able to get $5,000 to $25,000* in coverage, which can help to cover medical bills or funeral costs that your family might otherwise have to shoulder alone.
The cost of your life insurance policy will depend upon several factors, including which type of whole life insurance policy you need (Universal Life Insurance or Guaranteed Issue Whole Life Insurance) and your desired coverage amount.
Your age may also play a role in your rate, as well as your health and lifestyle (for Universal Life Insurance only). Guaranteed Issue Whole Life Insurance does not require a medical exam or health questionnaire. As long as you meet the age requirements for GIWL (50 to 85 years old), you can't be turned down for health reasons.
Our satisfied customers can tell you more about our life insurance products than any advertising campaign ever could. Read reviews from real-life customers who have purchased whole life insurance policies from AIG Direct.
1. https://www.epi.org/publication/retirement-in-america/#charts (2016)