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Whole life insurance offers lifelong coverage as long as you continue to pay premiums. Not only can your loved ones receive a death benefit payout if you pass away, but you can also build cash value over time. Therefore, a whole life insurance policy may be a good option to consider, even though it’s more expensive than other types of policies. Keep reading to find out what whole life insurance is, how it works, and whether this permanent life policy works for your unique budget and needs.
Whole life insurance offers lifelong coverage if you continue to make your fixed premium payments. No matter when you pass away, your beneficiaries will collect a guaranteed payout or death benefit. You’ll also be able to build cash value, which will accrue interest over time and could potentially be borrowed to use while you’re still living.
Whole life insurance can be worth the cost if you want coverage for the rest of your life. It can help give you some much-needed peace of mind knowing that your loved ones can receive the death benefit payout no matter when you pass away. This policy can also be worthwhile if you like the idea of predictable premiums that typically won’t change over time and a cash value account you may be able to access through a withdrawal, loan, or by surrendering the policy. In addition, you may want to consider a whole life policy if you’d like to diversify your investments or leave an inheritance.
Term life and whole life insurance are two popular policy options that are available through Aflac. If you opt for term life insurance, your beneficiaries will receive a death benefit payout if you pass away while the policy is in effect. Usually, this type of policy lasts 10, 20, or 30 years. Since there is no cash value component and the policy might expire without providing benefits, term life insurance typically comes with more cost-effective premiums than a whole life policy.
Whole life insurance, on the other hand, will cover you throughout your lifetime, rather than a set period of time. It pays out a guaranteed death benefit amount and comes with a cash value component you can tap into while you’re still alive, under certain circumstances. Due to its lifelong coverage and cash value account, a whole life policy comes with higher premiums.1
Don’t wait until it’s too late. Help cover yourself and your family with coverage from Aflac.
To decide if whole life insurance is a worthwhile investment, consider the following:
Think about who you would like your life insurance policy to cover and for how long. If your dependents will only require your financial assistance during a set period of time, term life insurance might make more sense. But if you have a dependent with a disability who will need lifelong coverage, for example, whole life insurance may be a better fit.2
If your primary goal is to help protect your partner and children financially with a death benefit in the event you suddenly pass away, term life insurance may be your best bet. However, if you’d like to diversify your investments or leave a legacy, whole life insurance with cash value might be the ideal option.
Take inventory of your debts, which might be your mortgage, car loans, and student loans. Whole life insurance may be worth it if you have several large debts that will take a while to repay.
Figure out how much you can spend on a life insurance policy each month. If you’re okay with higher premiums in exchange for lifelong coverage and a cash value account, whole life insurance may be a viable option. For more cost-effective coverage, you might want to consider a term life policy instead.
Whole life insurance might be worth the extra money in these situations:
If you have lifelong dependents, such as a partner or children with disabilities, whole life insurance can check off all your boxes. You’ll be able to help give your family financial stability and have the reassurance of knowing they’ll be better protected no matter what with a whole life insurance policy.
You may be looking for various financial vehicles that can diversify your investments. Whole life insurance can help, as its cash value component grows at a set rate. This means you can enjoy guaranteed returns that aren’t subject to market fluctuations.
Whole life can be worth it if you want to leave a lasting legacy. The death benefit payout can help cover your child’s college education, help a family member buy a house, or help assist with any other expenses that can financially support your loved ones. Or, if you designate a charity as your life insurance beneficiary, the payout can help a cause you believe in.
Any increase in the cash value of a whole life policy is not subject to income tax while the cash remains in the policy. This can help make investing in whole life insurance worth it.
The amount of whole life insurance you need depends on your particular situation. However, considering factors like the financial obligations you’d like to cover, your budget, and personal preferences can help you make an informed decision. A good rule of thumb is to apply for coverage worth at ten times your annual salary.3 You can always consult a financial advisor to steer you in the right direction.
Whole life insurance can be a useful financial tool for many types of customers, such as people with lifelong dependents or those looking to diversify their investments. If you’ve decided whole life insurance is worth it, Aflac offers whole life insurance with more flexibility and consistent premiums. Coverage will last your entire life, and you’ll be able to access the cash value account while you’re still alive. Get a quote today!
1 U.S. News - Term vs. Whole Life Insurance. Updated February 6, 2024. Accessed May 28, 2024. https://www.usnews.com/insurance/life-insurance/term-vs-whole.
2 Nerdwallet - Life Insurance Planning for Parents of Children Living With a Disability. Updated April 29, 2024. Accessed June 7, 2024. https://www.nerdwallet.com/article/insurance/life-insurance-parents-special-needs-children/.
3 CNN – How Much Life Insurance Do You Need? Updated February 28, 2024. Accessed May 28, 2024. https://www.cnn.com/cnn-underscored/money/how-much-life-insurance-do-i-need.
Content within this article 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. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.
Aflac coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, Aflac coverage is underwritten by American Family Life Assurance Company of New York.
Aflac life plans - 68000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. 65000 series: In Virginia, Policies ICC0965JTO & ICC0965JWO. B61000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B61JWO & ICC18B61JTO. In Delaware, Policies B61JWO, B61JTO. B60000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Q60000 series/Whole: In Arkansas & Delaware, Policy Q60100M. In Idaho, Policy Q60100MID. In Oklahoma, Policy Q60100MOK. Not available in Virginia. Q60000 series/Term: In Delaware, Policies Q60200CM. In Arkansas, Idaho, Oklahoma, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C. Not available in Virginia.
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).
In AR, DE, ID, OK and VA: 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.
Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY or VA. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations, and exclusions.
Aflac WWHQ | Tier One Insurance | 1932 Wynnton Road | Columbus, GA 31999
Aflac New York | 22 Corporate Woods Boulevard, Suite 2 | Albany, NY 12211
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