Part of living well is preparing well for when you are gone. Investing in life insurance will allow your employees the financial capability to keep their property safe, provide a means of living for their family, offer an inheritance to whomever they choose, and even cover the costs of a funeral. But what kind of life insurance policy should your business choose to offer? Here are a few reasons why “whole life” insurance may be more beneficial than “term life” insurance.
Coverage Until Your Death
A term life policy, as the name implies, lasts for only a specified period of time. If an individual passes away within that time period, beneficiaries receive a lump sum payment. A whole life policy, on the flip side, lasts the entirety of an individual’s life, guaranteeing coverage and payouts outside any time period. These policies are especially helpful for individuals with families, who anticipate needing some form of additional help after the death of their loved one.
The Cash Value
Additionally, whole life insurance policies build cash value over time, which can be used for whatever you need. Funds for schooling, retirement income, emergency funds, and supporting your career are just a few ways it can be used. You may even be able to convert life insurance premiums into cash to pay for assisted living! This is an incredibly helpful element of whole life policies that term cannot offer, and is significantly more flexible than term policies, which keep funds locked until the death of the holder or the expiration of the policy. Best of all, loans taken out of whole life policies are tax-free. Beneficiaries and holders can feel confident that they’ll have access to this money when they need it, even if that time comes before the holder’s death.
Frontloading Your Policy
One aspect of whole life policies that sometimes deters holders is the high price of premiums at the beginning of their policy. These premiums cost more than the cost of the actual life insurance. However, as the holder ages, the opposite becomes true: premiums are less expensive than the insurance itself, and the overall cost is less than the average term policy for an older policyholder. “Frontloading” a policy like this allows for those benefits of lifelong coverage and substantial cash savings to accumulate while they are in prime working years, rather than having to pay high rates during their retirement years.
Help your employees and their future with the right financial preparation! A whole life insurance policy may be the best means of the best preparation available. Look at the different options available to and decide what type of life insurance benefits to offer at your company.
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