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What Is Whole Life Insurance?Whole life insurance is protection against the loss of life for the remainder of or your “whole” life. As long as the premium payments are made, your policy stays in-force and active.
How Much Does Whole Life Insurance Cost?
The national average cost of whole life insurance is about $2,400 to $3,600 per month for a healthy 30- to 40-year-old purchasing a $250,000 policy. Actual costs vary based on age, health, gender, and coverage amount. Premiums are fixed and contribute to both insurance coverage and cash value.
How Much Does Whole Life Insurance Cost Per Month?
The average monthly cost of whole life insurance is about $200 to $300 per month for a healthy 30- to 40-year-old purchasing a $250,000 policy.
What Does Whole Life Insurance Cover?A whole life insurance policy covers almost anything you can think of and the payout is a lump sum payment, once it’s paid out to your beneficiary they can use it to pay for anything. Here is a list of a few things you can do with a life insurance payout:
Pay Off Your MortgageGet rid of your car noteClear credit card debtCover Kids College ExpensesPay TaxesPay Daily Living ExpensesUse As Income ReplacementLong Term Investments (Here are 30+ Ways To Invest)
Cover Child Care ExpensesPay final expenses of the insuredHow Much Whole Life Insurance Do You Need?At Simply Insurance we recommend that you purchase up to 30x your annual income; however; if the premiums are too expensive for that policy then you at least want a policy based on 10x your annual income in life insurance.
So if you make $50,000 / year, a policy for $500,000 would be our suggestion.
Just remember to buy life insurance that you can afford. If you are buying for final expenses, the national average for burial insurance is around $10,000 so anywhere between that and $15,000 is more than enough.
Who Buys Whole Life Insurance
People Who Want Permanent CoveragePeople who want permanent coverage usually need it for things like:
Estate Planning Final ExpensesGrow Cash ValueLevel Premiums For LifeHigh Income Earners High Income earners are going to need whole life insurance for a completely different reason, for things like:
stashing away money tax efficientlyusing paid up additions for extra tax savingIRA AlternativeInfinite Banking see belowHow The Whole Life Insurance Underwriting Process WorksWhole life insurance is going to last for your whole life as long as the premiums are paid. These policies also build cash value, the longer the policy is in-force, the higher the cash value can become. If you are going with a traditional whole life insurance policy then underwriting might look like this:
Medical Exam – At no cost to you, a medical examiner will come out to your home or place of work to complete your exam. Medical Records Request (APS) – Some underwriters will request your Attending Physicians Statement (APS) along with your medical exam. These companies want to make sure they have a clear picture and are able to offer you the best rate possible.MIB Check – This is going to check to see if you have any history with past insurance companies or have applied for coverage recently. MVR Check – This will be used to determine if you are a reckless or crazy driver. Mainly looking for things like a DUI or DWI.
Prescription Check – This check will be used to make sure your statements match the prescriptions you take.All of these reports are used together to determine your insurability with a particular company. Remember that each company has their own underwriting guidelines so a “No” from one company doesn’t mean an “No” for them all.
The Biggest Myth About The Cost Of Whole Life Insurance
The biggest myth about the cost of permanent life insurance is that it’s too expensive. A recent study from LIMRA found that 63% of people said they wouldn’t get life insurance coverage because of its cost. However, the same study found that life insurance policy quotes are 80% than what people thought they were. Don’t hold back, it is more affordable to buy whole life insurance than you think. Didn’t think you could get cheap whole life insurance? Guess Again!
Whole Life vs Universal Life
Whole life and universal life are similar in that they offer the ability for you to have coverage for your entire life to make sure your beneficiaries will receive some sort of payout; however, they differ in the flexibility of premiums and costs.
Whole Life Insurance
(Insurance for your entire life)
Coverage Last For Your Whole LifeGuaranteed Level Premiums For LifePolicy Builds Cash ValueRetirement PlanningPremiums Are More Expensive Than TermUniversal Life Insurance(Flexible Premium Rates life Insurance)
Potential To Earn DividendsFlexible Premium PaymentsCoverage Up To Age 121Guaranteed Universal Life OptionVariable Universal Life OptionWhole Life vs Term Life
The battle of whole vs term always comes down to the different whole life and term life insurance quotes and rates, as well as the financial protection of your loved ones.
Whole Life Insurance(Insurance For Your Entire Life)
Retirement PlanningGuaranteed Level Premiums For LifeCoverage Last For Your Whole LifePolicy Builds Cash ValuePremiums Are More Expensive Than TermTerm Life Insurance(Insurance Protection For A Certain Period Of Time)
Lowest Monthly Premium5,10,15,20,30 Term Length OptionsRates Can Increase At The End Of The TermReturn of Premium Options AvailableTypes of Whole Life Insurance
There are two types of life insurance, Cash Value Whole Life and Final Expense Life Insurance. From my experience, who needs the products and how they are used will vary drastically.
Below is a general idea of the products benefits and use:
Cash Value Whole Life Insurance (Permanent Life Insurance)Age Range: 0 – 85
Coverage Amounts: $50,000 & Up
Health Rate: Preferred Plus to Table Ratings
Length of Coverage: Whole Life
Approval Speed: Few Days – Few Weeks
Final Expense Life Insurance (Life Insurance For Your Burial Expenses)Age Range: 45 – 85
Coverage Amounts: $2,000 – $25,000
Health Rates: Standard or Guaranteed
Length of Coverage: Whole Life
Approval Speed: Instant or Few Days
How The Approval Process For Whole Life Burial Insurance WorksThe approval process is much simpler for Burial Insurance or Final Expense Insurance. These products usually have 3 Approval Outcomes:
Level / Standard – This product has several health questions and maybe a phone interview, but usually no medical records or exam and is the most affordable out of the options. Graded – This product has only a few health questions, is in the middle on pricing, and also has a 2 year period where the coverage amount “Grades up” to the full amount.Guaranteed Issue – This product has no health questions, no medical exams, no medical records and no telephone interview; however, it does have a waiting period and more expensive monthly premiums.Can I Get Whole Life Insurance Online? If you are looking to shop whole life insurance online, then you have come to the right place. We have made it easy to apply for life insurance online by offering multiple whole life insurance products. Our partners make buying whole life insurance online incredibly easy and affordable.
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