Do you know the characteristics of whole life insurance? Before going into the characteristics, you need to know what whole life insurance is. Whole life insurance is a type of insurance that provides coverage for the named person from the time a person opens the policy until the insured individual’s death. The premiums paid on this type of policy help in building the policy’s value. Some insurance policies have a maturity date when the money can be paid out if the insured individual has not passed away at that agreed time. The date is usually the 100th birthday of the insured individual. The premium usually stays the same throughout the life of the policy till redemption.

One characteristic of whole life insurance is the cash value. Part of each and every premium goes towards building the monetary value of the policy. The policy pays upon the demise or 100th birthday of the insured person at that value. Most policies offer the option of taking out loans against the cash value. This is an excellent feature for those people who hit financial straits and require a bit of help. A person can repay the issued loans at a fair interest rate to restore the cash value of the insurance policy. But, if the loan has not been unpaid, the amount of the loan and also interest will come out of the payoff amount when the insured person dies. What is leftover will then go to the beneficiaries of the policy.

Another characteristic of whole life insurance is the steady premiums. With term life, a person can also get a steady premium for the length of the policy term. But, if a person wants to renew the policy after its term has expired, the insurance provider will most likely raise the premium levels significantly. With this type of insurance, the premiums remain the same from the time a person takes out the policy until the demise of the insured individual. The figure may look large at first, however over the years the premium will become quite affordable as the price of other things continues to rise.

Another characteristic of this type of insurance is the tax benefits it offers to the insured person and the beneficiaries. The insured individuals pay no taxes on the accumulating cash value of the insurance policies. Once the insured individual dies, the beneficiary can get the insurance policy proceeds without experiencing income taxes in many circumstances. This type of insurance policy make up the majority of insurance policies sold in the US. They provide protection for the insured’s loved ones in case the person dies at any age.

The cost of Whole Life Insurance varies greatly across various insurance providers. Therefore, it is imperative to shop around for policies in order to avoid making mistakes. The cost of the policy depends also on how much cover a person chooses to purchase. Those who are considered high risk, like applicants who are smokers, overweight or those who have a dangerous occupation or hobby pay more.

More Info visit http://safepacific.com/what-are-the-characteristics-of-whole-life-insurance/