Understanding Whole Life Insurance and Its Value

Whole life insurance is a type of permanent life insurance that provides a guaranteed death benefit and a cash value component. The cash value grows over time and can be borrowed against or used to pay premiums.

Whole life insurance policies are designed to last a lifetime, providing a guaranteed death benefit to your loved ones. This can be a significant advantage over term life insurance, which only provides coverage for a specific period of time.

A whole life insurance policy's cash value can be used to supplement your retirement income or to pay for unexpected expenses. This feature can be particularly valuable for individuals who are self-employed or have irregular income.

One of the benefits of whole life insurance is that it can be used as a tax-deferred savings vehicle.

Related reading: Term Life Insurance Provides Protection for a Specific of Time.

Whole Life Insurance is a type of permanent life insurance that provides death benefit coverage for the policy owner throughout their life.

It's designed to last a lifetime, as long as all premiums are paid on the predetermined schedule.

You can expect locked-in payments established at the start of the policy.

This means you'll know exactly how much you'll be paying each month or year.

Whole Life Insurance policies build cash value as they mature.

The cash value can be borrowed against, giving you a source of funds in times of need.

Unlike term life insurance, which only protects you for a specific duration, Whole Life Insurance offers permanent protection.

It's the most basic type of permanent life insurance that offers consistency along with some predetermined, guaranteed cash value growth.

There are other types of permanent protection that offer a death benefit and are designed to build whole life insurance cash value, such as universal life insurance, indexed universal life insurance and variable universal life insurance.

Additional reading: A Whole Life Insurance Policy Offers Protection

Whole life insurance offers a unique combination of benefits to help meet your needs, including lifetime protection and a cash value that builds over time.

One of the main benefits of whole life insurance is that it provides straightforward, lifelong coverage that can help you lay the foundation for added long-term financial security. The policy builds cash value over time and once locked in, your premiums never increase.

Whole life coverage may be right for you if you need coverage that doesn't require a medical exam or health questions, or if you have a tight budget or fixed income and need a premium that won't increase.

Here are some key features of whole life insurance:

Whole life insurance can be a smart, simple, and reliable life insurance option for you, your family, and your future.

Your premium payments remain the same over the life of the policy, and a portion of it goes toward the insurance, which includes any fees and death benefit coverage.

A small amount from each payment is set aside to build up your predetermined, guaranteed cash value.

With this policy, you can borrow against the cash value if needed.

Your premiums can be higher than for term life policies, but you get a guaranteed death benefit and the potential for cash value growth.

Whole life policies provide coverage for the insured person's lifetime as long as premium payments are in good standing.

You can access the cash value under certain conditions, which may include borrowing against it or withdrawing from it.

Keep in mind that borrowing against the cash value will reduce the death benefit paid to your beneficiaries.

Here's an interesting read: Whats the Average Rate for Borrowing against Life Insurance Policy

Whole life insurance is designed for people who are looking for a policy that lasts their whole life, with premiums that stay consistent over time. This type of insurance is ideal for those who want a guaranteed, tax-deferred cash value with a fixed rate of interest over time.

With whole life insurance, premiums are typically paid for the entire duration of the policyholder's life or up to a specified age, depending on the terms of the policy. This provides peace of mind, knowing that coverage is in place for as long as you need it.

Additional reading: Can I Deduct Life Insurance Premiums as a Business Expense

You may benefit from whole life insurance if you need coverage that doesn't require a medical exam or health questions. This is especially helpful for those who may have health issues or prefer not to undergo a medical exam.

Whole life insurance is also a good option for those with a tight budget or fixed income who need a premium that won't increase. This type of insurance provides stability and predictability, which can be a huge relief for those living on a fixed income.

Here are some scenarios where whole life insurance may be right for you:

Talk to a specialist to determine if whole life insurance is the right choice for you.

You can purchase a whole life insurance policy at any time, and Nationwide offers flexible payment options to fit your needs.

Nationwide whole life insurance policies allow you to make payments at various stages of your policy, including at the time of purchase, to pay premiums, or to pay off the policy loan balance.

You have choices with Nationwide whole life insurance payment options, so select the one that works best for you.

For another approach, see: Nationwide Pet Insurance Major Medical Coverage

20-Pay whole life insurance policies are a great option for those who want predictable premiums.

With a 20-Pay whole life policy, your premiums remain the same for 20 years, providing you with financial stability and peace of mind.

This type of policy is ideal for individuals who can commit to paying the same premium amount for two decades.

Once your premiums are paid for 20 years, the policy is paid in full, and you'll no longer have to worry about making payments.

This can be a significant relief for those who value simplicity and predictability in their financial planning.

Recommended read: Can You Claim Life Insurance Premiums on Your Taxes Canada

To buy whole life insurance, you'll need to work with an insurance professional. If you don't have one, you can call 1-866-207-9160 for a no-obligation consultation.

The consultation is available Monday through Friday from 9 a.m. to 8:30 p.m. ET.

This assumes your contract qualifies as life insurance under section 7702 of the Internal Revenue Code and is not a modified endowment contract under section 7702A.

You have choices with a Nationwide whole life insurance policy. Select the payment option that works best for you.

You can choose how the death benefit will be paid. The insurance company usually pays it as a single lump sum, but you or your beneficiary can choose from other options.

Here are some common options:

You can also get cash from your policy in other ways. If your policy has a cash value, you can withdraw from it or cash your policy in.