Life Insurance
What is whole life insurance and how does it build cash value?
Whole life insurance provides permanent coverage for your entire life as long as premiums are paid. Part of each premium goes into a cash value account that grows at a guaranteed rate (typically 2–4%). You can borrow against the cash value or surrender the policy for its cash value. Premiums are fixed and guaranteed never to increase. The death benefit is guaranteed and generally income-tax-free to beneficiaries.
Key Points
- Permanent coverage — never expires as long as premiums are paid
- Builds cash value at a guaranteed rate (typically 2–4%)
- Can borrow against cash value — no credit check, no approval required
- Premiums are fixed and guaranteed never to increase
- Death benefit is guaranteed and income-tax-free to beneficiaries
- Participating policies may earn dividends (not guaranteed)