Whole life insurance is a type of permanent life insurance policy, which means that it can oﬀer coverage for the rest of your life. As long as you remain up to date on your payments, you can continue to have life insurance coverage until the day you die. This means that your beneficiaries will be much more likely to receive a life insurance policy payout.
It’s easy to see why so many people opt for whole life insurance. Here is some additional important information about how permanent life insurance policies work.
It’s important to consider the features and limitations of permanent life insurance so you can anticipate how these types of policies may benefit you.
It’s possible for people to outlive the length of their term life insurance coverage, which only oﬀers coverage for a set period of time. A whole life insurance policy, however, can stay in force until the day you die, provided you continue to pay your premiums as scheduled.
In many cases, the premiums for a permanent life insurance policy will remain the same forever. This can help eliminate the need to worry about future aﬀordability, and it can help allow for easier and more predictable budgeting.
Certain types of permanent life insurance policies take a portion of each paid premium and apply it to a cash value account. Over time, this cash value grows and eventually may be withdrawn or loaned from the policy.
Please note the limitations of Permanent Life insurance:
Permanent Life Insurance can be a complex product. To borrow against the savings portion of a permanent life insurance policy, there is usually a waiting period after the purchase of your policy for suﬀicient cash value to accumulate. Also, if the amount of the unpaid interest on your loan plus your outstanding loan balance exceeds the amount of your policy's cash value, your policy and all coverage will terminate.
There are diﬀerent types of permanent life insurance, and each one is designed to fit diﬀerent needs regarding financing, payouts, accessibility to assets and more. Below are some of the permanent life insurance policies you can consider.
Universal life insurance dedicates a portion of each paid premium to a cash value that gradually accumulates over time. This cash value can be accessed by the individual who owns the policy and borrowed against, similar to a loan.
There are two potential benefits to having this cash value in place. For one, the money you access is typically tax-free. And two, if you take out a loan from the policy, it does not necessarily have to be paid back. In most cases, any money that is not returned is simply deducted from the death benefit paid out to your beneficiary.
The cash values found in this type of life insurance policy can come in handy if you need cash in a pinch, have a medical or home emergency.
Like universal life insurance, variable life insurance also carries a cash value. These cash values are usually invested by the insurance company into a number of sub-accounts, much like a mutual fund. Instead of the cash value growing over time through paid premiums, the value grows according to the performance of those sub-accounts. The cash value that accumulates may then be available for withdrawal.
Life insurance rates are often determined by an applicant’s health. Individuals who have some health issues may be faced with higher premiums (or in some cases, even denied coverage completely).
With guaranteed issue whole life insurance from AIG Life Insurers, there is no medical underwriting, and an applicant’s health has no bearing on the cost of their premiums. The health questions and medical exam required by many types of life insurance policies are not required for guaranteed issue whole life insurance.
Applicants for guaranteed issue whole life insurance from AIG Life Insurers between the ages of 50 and 85 can’t be turned for a policy due to health reasons.
Coverage is subject to receipt of payment and verification of identity as required by law and is eﬀective upon receipt of policy.
Some permanent life insurance policies can feature a number of additional features, some of which may include:
Many forms of life insurance make a payment to a beneficiary after the death of the insured. Survivorship insurance is a type of life insurance on two people (usually married) that provides benefits to the beneficiaries only after the last surviving person on the policy dies.
Life insurance policies are generally paid with a monthly or sometimes annual payment. But some permanent life insurance policies may allow you to purchase coverage with one lump sum payment. The advantage is that you’ll never have to worry about missing a premium payment.
A permanent life insurance policy with graded premiums has payments that start out lower and then gradually increase over time. A younger person just starting out in their career may have an easier time aﬀording these early smaller payments. As they advance in their career and begin to make more money, they may then be better suited to take on the increased payments.
Selecting permanent life insurance can involve deciding which type of policy may be right for you and determining how much coverage you need. An AIG-appointed life insurance agent can help you calculate how much life insurance you need and provide you with a policy quote.
Contact us at 855-382-3599 today to learn more about how whole life insurance and other permanent life insurance policies can benefit you and your loved ones.
*Please visit http://www.aig.com/individual/insurance/life/variable-universal-life for more information on variable life insurance.
Agency services provided by AIG Direct Insurance Services, Inc. ("AIG Direct"), CA license # 0B57619 and AR license # 0100105378, a subsidiary of American General Life
Insurance Company ("AGL"), Houston, TX and an affiliate of The United States Life Insurance Company in the City of New York ("US Life"), New York, NY, all members of American
International Group ("AIG").
Policies issued by: American General Life Insurance Company (AGL), Policy Forms: ICC15-15532, 15532, 15532-5, 15532-10. Rider Numbers: ICC15-15200, ICC15-15201, 15200,
15200-10, 15200-35, 15201, 15201-9, 15201-10 and 15201-35. Issuing company AGL is responsible for financial obligations of insurance products and is a member of American
International Group, Inc. (AIG). AGL does not solicit business in the state of New York. Products may not be available in all states and product features and rates may vary by state.
Guarantees are backed by the claims-paying ability of the issuing insurance company. ©2018 AIG. All Rights Reserved
Identifying an attractive whole life insurance for seniors
Seniors may have different life insurance needs than younger insurance consumers. Whole life insurance is one type of permanent coverage seniors can consider.