Whole Life Insurance
Whole life insurance provides permanent death-benefit protection with a savings component that builds cash value and pays dividends.
As long as you pay your premiums, your death benefit will never expire. It is guaranteed to be paid regardless of when you die, whether that’s tomorrow, in five years, 80 years or even further away.
Some types of insurance policies may require you (or allow you) to adjust your premiums over time. But the premiums that you pay for your whole life insurance policy are guaranteed to remain fixed and consistent for as long as you have your policy. Your premium also contributes to your cash value.
Life insurance has several key tax advantages. The death benefit is tax-free. Also, you can borrow against your cash value — perhaps to ride out a market downturn in retirement — without paying taxes as long as the loans are repaid properly.
Additionally, the cash value growth (in addition to growth through dividends) is tax-deferred — you will only owe tax on the growth if you surrender your policy and take out the money. You can always take the amount you paid in premiums tax-free.