Whole Life Insurance


What is Whole Life Insurance Policy?

Simply put, Whole Life Insurance policies provides life-long death benefit protection and cash values that are contractually guaranteed by the issuing insurance company. Whole life insurance is a versatile insurance product with additional features and options other than only death benefit. These additional features and benefits can be utilized to enhance the financial position of its policy owner. 

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Because of the contractual guarantees and additional features, whole life insurance requires significantly more premium than term or universal life insurance.

Who Should Buy Whole Life insurance Policy Coverage?

Whole life insurance requires a long-term financial commitment by the policy owner. Unlike level term life insurance, which requires considerably less premium for the same amount of death benefit protection, whole life insurance builds cash value and is the ONLY TYPE OF INSURANCE that is guaranteed to pay a claim no matter how long the insured lives.

The fact is you may never have a claim on your car insurance, you may never get sick and use your health insurance but the reality of whole life insurance is that if it is owned long enough, it will pay a claim.

People who buy whole life insurance should have a clear understanding of their long-term financial goals and a good understanding of how the features of whole life will help them achieve those goals more efficiently than their alternative. People who buy whole life coverage will also need to have the financial means to pay the required premium, either through income they are receiving or a redistribution of equity in other less efficient financial assets. It can take several years for the cash value to “break-even

The younger the insured is when a policy owner buys whole life insurance, the better. This is because it allows the “power of compound interest” to work inside the policy thus reducing the amount of premium contributions required to meet the contracts obligation for the cash value to equal the death benefit at age 100. Also, the younger an insured is it is assumed they are healthy and will be underwritten at a better health class reducing the cost of the whole life policy.

Determining if Whole Life Insurance Policy is Right For You.

Though there are several options to surrender a whole life policy if you no longer want it, buying this form of life insurance coverage is a significant long-term commitment. Decision Tree Financial typically recommends someone buy term-life insurance to cover their immediate life insurance needs.

We understand it is difficult to understand why one would want to pay 20x more for the same death benefit coverage and that is why we recommend participating in our Wealth Performance and Protection System (WPPS) in order to take a comprehensive view of your current financial situation, your short-term and your long-term financial goals. This way you can see all of the financial alternatives you have and how they impact each part of your financial life to see if whole life insurance is the best place to allocate your resources.

How Decision Tree Financial Can Help You Understand Whole Life Insurance?

As a financial planning firm with a fiduciary responsibility to only make recommendations that are in your best interest, Decision Tree Financial will not sell you a whole life policy unless it is the best solution to accomplish your overall financial objectives.

A Whole Life Insurance Policy Contract Can Be Structured As a:

Straight Whole Life Insurance is designed for the policy owner to pay level premiums for the life of the contract.

Limited Pay Whole Life Insurance allows a policy-owner to contribute additional upfront level premiums over a number of years in order to be “paid up” in less years straight whole life

Single Premium Whole Life Insurance is a form of limited pay premium policy where the policy owner makes a one-time premium payment when the policy is issued allowing the policy to be “paid up” immediately.

Both Modified and Graded Premium Whole Life Insurance policies require less premium in the policy’s early years but require the policy owner to make larger premium payments in the future to “catch up” the policies cash value so that it will still equal the death benefit at a stated age