Whole Life Insurance | Lifetime Assurance
What are dividends in whole life insurance policies?
Dividends are potential benefits for holders of specific whole life insurance policies. They are a return of premiums when the policies perform better than anticipated. Policies that offer dividends are known as “participating” policies.
The amount of dividends you might receive depends on several factors related to the policy’s performance, such as investment returns, mortality rates, policyholder persistence, and administrative expenses. While dividends are not guaranteed, they provide a way for insurance companies to share their financial success with policyholders.
How can my business benefit from a whole life insurance policy?
Business protection insurance helps maintain continuity if a key person or partner dies. A whole life insurance policy can be useful for this. It can provide the necessary funds for buy-sell agreements and stock redemption plans, ensuring a smooth ownership transition. It also supports supplemental retirement programs for partners, securing their financial future.
Additionally, whole life insurance protects the business from the impact of losing a key employee by covering gaps in skills and expertise. It can also assist with business loans and mortgage payments. Overall, whole life insurance can help stabilize a business, keeping it operational through significant changes.
Can I withdraw funds from my whole life policy, and what happens?
Yes, you can withdraw the value of any accrued dividends or cash value from paid-up additional insurance. However, this withdrawal will decrease the policy’s death benefit.
Do I need to repay the loan on my policy?
You’re not required to pay back the loan principal out of pocket. However, it’s essential to pay the annual loan interest. If you don’t, the unpaid interest will be added to the loan principal, increasing the total amount owed. When the policy is surrendered, or a death benefit is paid, the loan amount, including any accrued unpaid interest, will be automatically deducted from the policy’s value.
How can a whole life insurance policy help with mortgage payoff?
A policy can provide financial security for your family in the event of your death. The policy’s death benefit can be used to pay off your mortgage, so your family is not burdened with the remaining loan. Additionally, the policy’s cash value component is accessible if needed, offering further support. By having a whole life policy, you can ensure that your home is paid off and your family’s financial future is protected.
What is a survivorship policy, and how can it help?
A survivorship policy, or joint life insurance policy, covers both spouses but pays the death benefit only after both have passed away. This type of policy is helpful for parents concerned about providing for a special needs child after they’re gone. It ensures that the child will have the necessary funds for their care. Additionally, survivorship policies can be used for funds to cover estate taxes.