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Life insurance is a versatile financial tool that can help benefit people of many backgrounds and life situations. It can help protect loved ones, offer a way to help protect wealth, and assist with estate planning. Whole life insurance, offering lifelong coverage and protecting your wealth, is one of the more popular policy types. This article will explore whole life insurance’s features and benefits and compare it to term life insurance to help you determine if this policy is right for your needs.
Whole life insurance is a permanent life insurance policy that offers a substantial death benefit to your loved ones when you pass away. A portion of each premium payment you make goes toward your policy’s cash value growth component. Your cash value will typically grow tax-deferred at a fixed interest rate.1
Whole life insurance comes with several features that are crucial to understand:1
Whole life insurance coverage lasts for life if you remain up to date on paying your premiums. This provides added peace of mind since you won’t have to worry about your coverage expiring.
The death benefit is the sum that is paid out to your beneficiaries if you pass away during the policy term. This payout can help your beneficiaries replace your income, pay off debts, and save for the future.
Whole life insurance has level premiums, meaning they do not change once you get your policy. This can allow payments to fit easily into your budget.
Cash value is a growth component that receives part of each premium. As mentioned earlier, it can grow tax-deferred at a fixed, guaranteed rate to help you protect your wealth and keep pace with inflation.
Riders let you add specific additional coverage to your policy. Some are free, while others can be added to your policy at a cost. For example, you can add an inflation rider to a whole life policy that raises your death benefit by a specified percentage every year based on inflation. As a result, you can reduce the impact of inflation on your death benefit and leave more money to your beneficiaries.
Don’t wait until it’s too late. Help cover yourself and your family with coverage from Aflac.
When your policy’s cash value grows enough through premium payments and interest earnings, here are two ways you can tap into it:
Additionally, you can receive the cash value minus surrender charges if you ever surrender your policy.
Below are the average monthly whole life insurance costs, by age, for healthy, non-smoking men and women.1 Please note, these are average costs, and Aflac's premiums may vary due to certain situations. They do not imply coverage.
| Men | Women | |
|---|---|---|
| 30 | $388 | $335 |
| 40 | $586 | $495 |
| 50 | $930 | $787 |
| 60 | $1,596 | $1,329 |
| 70 | $2,777 | $2,341 |
Here are some important differences between whole and term life insurance:
Here are some situations where whole life insurance could make sense for you:
Now that you know how whole life insurance works, it’s time to decide whether this type of policy is right for you. If you think whole life insurance can meet your needs, Aflac is here to help you get insurance coverage that suits your budget. Speak with an agent today to explore your options and get a quote.
1NerdWallet - What Is Whole Life Insurance, and How Does It Work? Updated December 12, 2023. https://www.nerdwallet.com/article/insurance/whole-life-insurance. Accessed March 19, 2024.
Coverage underwritten by American Family Life Assurance Company of Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York. 68000: In Arkansas, Idaho, Oklahoma, & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. In New York, NY68100-NY68400. In Virginia, Policies ICC0965JTO & ICC0965JWO. 65000: In VA, Policies ICC0965JTO & ICC0965JWO. B61000: In AR, ID, OK, & VA Policies: ICC18B61JWO & ICC18B61JTO. In DE, Policies B61JWO, B61JTO. B6000: In AR, ID, OK, PA, TX, & VA, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Q6000 Whole: In AR, DE & OR, Policy Q60100M. In ID Policy Q60100MID. In OK, Policy Q60100MOK. Q6000 Term: In DE, Policies Q60200M. In AR, ID, OK, Policies ICC18Q60200M, ICC18Q60300C, ICC18Q60400C.
Coverage is underwritten by Tier One Insurance Company. Final Expense: Arkansas, Delaware, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22. Aflac Final Expense policies are not available in New York.
Aflac Final Expense insurance coverage is underwritten by Tier One Insurance Company, a subsidiary of Aflac Incorporated and is administered by Aetna Life Insurance Company. Tier One Insurance Company is part of the Aflac family of insurers. In California, Tier One Insurance Company does business as Tier One Life Insurance Company (Tier One NAIC 92908).
This is a brief product overview only. Coverage may not be available in all states including but not limited to DE, ID, NJ, NH, NM, NY, or VA. Benefits/premium rates may vary based on plan selected. Optional riders are available at an additional cost. The policy has limitations and exclusions that may affect benefits payable. Refer to the policy for complete details, limitations, and exclusions. For costs and complete details of the coverage, please contact your local Aflac agent.
The content herein is provided for general informational purposes and is not provided as tax, legal, health or financial advice for any person or for any specific situation. Employers, employees and other individuals should contact their own advisers about their situations. Receipt of accelerated death benefits may affect eligibility for public assistance programs. Benefits may also be taxable, and are not expected to receive the same favorable tax treatment as other types of accelerated death benefits that may be available.
Aflac WWHQ | Tier One Insurance Company | 1932 Wynnton Road | Columbus, GA 31999
Aflac New York | 22 Corporate Woods Boulevard, Suite 2 | Albany, NY 12211
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