Understanding whole life insurance will help you make an informed decision when it comes time to purchase. Besides, insurance can be confusing – make certain that you are prepared and you will be in a much better position when it comes time to make your decision.
Types of Life Insurance
In the state of Illinois, there are basically two types of life insurance available – permanent and term. Permanent Life Insurance is coverage for your entire life. The premium will never change, nor will the coverage as long as you are alive. In addition, a portion of every payment accumulates as a cash value, which is generally invested by the insurance company and can be accessed by the policyholder.
Whole Life Insurance Defined
Whole life insurance is a type of permanent life insurance designed to stay in effect throughout a person’s entire lifetime. Typically, rates remain the same for the life of the policy as long as it remains current and premiums are paid as agreed. Premium rates tend to be much higher for whole life insurance than for term life insurance, simply because of the cash value that increases during the life of the policy and can be used by the policy owner anytime through loans or surrender.
For instance, as a policyholder, you can typically borrow money against the cash value and any unpaid policy loans or interest will be deducted from your death benefit. If you choose to cancel your policy, or surrender, you can also access the cash value. What’s more, most whole life insurance policies have dividends which can increase the value of a policy over time.
Where to Look for Whole Life Insurance
You can always start by flipping through the phone book or go online and do a customized search. However, be careful because many web sites simply advertise low rates as a way to entice you. Another option is to contact an authorized and licensed agent representative to discus your options. Senior Services of Illinois’ licensed education specialists are a wonderful resource for providing you with a personalized touch.
Remember, life insurance is a big decision and one that should only be made after careful consideration.