What are the benefits of a whole life insurance policy?
Updated October 13, 2020 . AmFam Team
There are a lot of good reasons to get a whole life insurance policy. Most of the time, we start thinking about life insurance when others begin to depend on us. Compared to other life policies, our DreamSecure Whole Life insurance policies go the extra mile to help you provide financial protection for your family and the people in your life who count on you the most.
So, what are some benefits of a whole life insurance policy? Simply put, a whole-life policy offers lifelong coverage, which builds cash value over time. And the premium you pay doesn’t increase — regardless of your age or changes in your medical condition. Better still, the policy may offer the potential for dividends, although dividends are not guaranteed.
There are many advantages to American Family Life Insurance Company’s Whole Life Insurance options, so let’s take a closer look. But first, watch this short video for an explanation of the difference between term life insurance and permanent life insurance.
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It’s the right time for life insurance but you can’t decide which policy type is right for you.
Luckily, American Family Life Insurance Company is here to help with all your life insurance needs!
To start, there are two main types of life insurance: term life insurance and permanent life insurance.
Term life insurance is a temporary policy that lasts for a set amount of time. Typically 10, 15, 20 or 30 years. Term life only delivers a payout if the insured passes away while the policy is active.
Term life insurance is perfect for when you want financial protection for a limited amount of time.
For example, when you have a mortgage or other big loan, have children in the house, or are paying or planning for post-secondary education.
Plus, term life can be more affordable than permanent life insurance policies.
To meet your unique needs, American Family Life Insurance Company offers two types
of term life insurance, DreamSecure Simplified Term Life and DreamSecure Term Life.
Permanent life insurance is another common type of life insurance.
Whereas term only covers a set number of years, permanent life insurance can last your whole life!
In fact, whole life insurance is one type of permanent life insurance.
Permanent life insurance can help provide financial protection at any and every point of your life.
It can help your loved ones cover things like funeral costs or paying off debts, can be used to leave a legacy to loved ones, and even builds cash value over time!
Plus, with a variety of coverage options available, you can build a permanent life policy to fit your unique needs and specific budget.
So it’s always a good time to consider a DreamSecure Whole Life Policy from American Family Life Insurance Company.
It’s important to remember that term and permanent life insurance isn’t an either/or question. You can own multiple policies for even more customized protection!
For example, let’s consider Alexis.
She and her husband just bought their first home, so they each get a DreamSecure Simplified Term Life policy for the duration of the mortgage to help make sure the other won’t lose the house should one of them pass away.
After the birth of their first child, Alexis decides to add a second term life policy. This time a DreamSecure Term Life for additional coverage.
When the kids grow up and move out, Alexis and her husband look toward their future. They decide now’s the perfect time to add a DreamSecure Whole Life Insurance policy.
Decades later, when Alexis passes peacefully, her survivors, her husband and her children, have her whole life insurance policy to cover expenses such as funeral costs.
They love and appreciate how well Alexis has taken care of them financially, even after she’s gone.
Ready to learn more about how your life insurance can help make sure your loved ones are financially protected after you’re gone?
Contact your American Family agent today.
7 reasons to get whole life insurance
Whole life insurance coverage, sometimes called permanent insurance, is long-term coverage designed to last a lifetime. Unlike term life insurance products that offer coverage for a specific period of time, whole life insurance guarantees a death benefit to beneficiaries as long as the premium continues to be paid. And it comes with living benefits like a cash value component.
Permanent life insurance policies can serve you and help financially protect your family. Here are a few other benefits of a whole life policy:
1. Policy premiums remain constant across the years
With a whole life policy, your premium will not increase. And as you begin to think about retirement planning, you’ll find comfort in having a fixed-price or a policy that could be fully paid for before you even reach your senior years.
2. Accumulates cash value
A whole life policy also offers a feature where you can accumulate cash value that you can borrow against in the form of a loan.*
3. May offer the potential for dividends
Although not guaranteed, you may benefit from a whole life policy that offers the potential for dividends. These dividends can be used to help:
- Reduce the amount of premiums due on your policy
- Provide paid-up additions to your life insurance coverage amount
- Accumulate interest from the dividends
- Spend any way you wish, as they can be paid out to you in cash
4. Guaranteed Purchase Option
If your policy contains a Guaranteed Purchase Option or you’ve bought a Guaranteed Purchase Option Benefit Rider, you’ll be allowed to purchase extra permanent life insurance without a medical exam — or even medical questions. Purchase is limited to specific dates and life events, so be sure to refer to your policy or rider for details.**
5. Tax-deferred growth
With a whole life policy in place, the cash value that accumulates over the life of the policy is tax-deferred.
6. Policy remains in-force regardless of changes in health status
Offering real peace of mind with the knowledge that you’ve helped protect your beneficiary’s financial future, whole life policies won’t be canceled if your health should decline.
7. Lifelong coverage
Unlike term life coverage, whole life policies are typically in force for the entire life of the insured, as long as the policy’s premium payment is made.
Get an instant life insurance quote
Use our life insurance calculator to get a real-time estimate on a life insurance policy.
Benefits of whole life insurance vs. term life insurance
When you select life coverage, you’ll usually have the freedom to choose a policy that best suits you and your family. If you currently have a term life policy, you may be able to convert it to a whole life insurance policy. Take a look at this term vs. whole life comparison chart to get a better idea of which American Family Life Insurance Company option works best for you:
Life products | Term life insurance | Whole life insurance |
|---|---|---|
Temporary coverage | Yes | No |
Permanent coverage | No | Yes |
Cash value | No | No |
Streamlined purchase process | No | Yes |
Other key features | Some customers will not need a medical exam.*** | Many customers will not need a medical exam.***† |
Consider whole life insurance for better peace of mind
When it comes to life insurance, remember — you’ve got options. With whole-life coverage, you may find more peace of mind knowing that the cash value you build can have a variety of uses later in life, and your coverage is lifelong. Compare your life insurance options to find a policy that works for you.
Protect your loved ones’ financial futures and get a quote for whole life insurance today. Need more info? Connect with an American Family Insurance agent or learn more about life insurance.
This is a brief description of coverage and is subject to policy and/or rider terms and conditions which may vary by state. Fixed and guaranteed premiums are statements about the policy as determined at issue, and any changes made to a policy may affect the premium and are subject to our underwriting rules. The words lifetime, lifelong and permanent are subject to policy terms and conditions. DreamSecure Whole Life policies mature at age 121. Please check with an American Family agent for details on coverages and restrictions.
*Any loans taken from your life insurance policy will accrue interest. Any outstanding loan balance (loan plus interest) will be deducted from the death benefit at the time of claim or from the cash value at the time of surrender. If the loan balance grows too large for the cash value to support it, the policy could terminate.
**The Guaranteed Purchase Option may be exercised only at specified dates and life events and is subject to benefit amount limitations. See rider for additional details.
*** According to company underwriting guidelines.
† Children ages 0-17 won't need a medical exam — they'll simply answer some health questions to determine eligibility.
Policy and rider forms: ICC18-33 (10), ICC18-33 (15), ICC18-34 (20), ICC18-35 (30), L-33 (10)(ND), L-33 (15)(ND), L-34 (20)(ND), L-35 (30)(ND), L-33 (10)(SD), L-33 (15)(SD), L-34 (20)(SD), L-35 (30)(SD), ICC18-36 (10), ICC18-36 (15), ICC18-36 (20), ICC18-36 (30), L-36 (10)(ND), L-36 (15)(ND), L-36 (20)(ND), L-36 (30)(ND), L-36 (10)(SD), L-36 (15)(SD), L-36 (20)(SD), L-36 (30)(SD), ICC17-225 WL, L-225 (ND) WL, L-225 WL, ICC17-227 WL, L-227 (ND) WL, L-227 WL, ICC17-223 WL, L-223 (ND) WL, L-223 WL, ICC17-224 WL, L-224 (ND) WL, L-224 WL, ICC17-228 WL, L-228 (ND) WL, L-228 WL, ICC17- GPO WL, L-GPO WL
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