Whole Life Insurance offers level premiums and life insurance protection for as long as you live; provided that premiums are paid as required, thus keeping the policy in force. StateTrust Life & Annuities offers whole life policies that can be paid with a single premium, premiums payable to 99 years of age, or somewhere in between. Whole life policies also provide for the accumulation of cash value which can be used when you need it. Whole Life Insurance offers a “cash value” which is designed to be a cash reserve that will build up against the known claim – the death benefit. A certain amount of interest or dividends is guaranteed to the cash value account. Upon the death of the insured, the cash value will be surrendered to the insurance company, and the beneficiary will receive the death benefit. If before his/her death, the insured wishes to borrow the cash value and forfeit the death benefit, the cash value will be paid back with interest minus dividends paid (subject to certain waiting periods, surrender charges, and other terms). Benefits
- A guarantee that cash values will increase.
- Flexibility in the use of dividends to reinvest back in the policy to increase the death benefit and cash value, to reduce the premium payment, or as a check payable to the owner of the policy.
- Cash value grows tax-deferred with compounding interest.
- Taxes will usually only be applied on the gains of the cash account that exceed the total premium outlay. Thus, whole life insurance policies can be used as a retirement funding vehicle as well as for risk management (Note: Consult with a lawyer for the specifics of your particular tax jurisdiction).