Whole Life Insurance Plan provides protection for the entire life of the insured person. There are various options to pay premium for these plans. You can choose to pay for life or you can choose to pay in 10, 15, 20 years or till age 65, depending up on the age of the person.
There are participating plans too which pay dividend to the policy holders from time to time which can be utilized either to pay the premium or to buy additional coverage with that amount or you can have it in cash from the insurance company.
There is guaranteed Cash Value in the paid-up plans. You can withdraw the cash value and surrender the policy. Many people call it LIFE INSURANCE WITH MONEY BACK OPTION. If you need a protection for 25 years, surrender the policy after 25 years and get the cash value.
Don’t surrender the policy if you want to use the cash value and keep the insurance too. You can borrow from the cash value. Certain portion of the cash value can be borrowed by you while you are still alive to supplement your retirement income or to take care of your other financial needs like to pay off your mortgage, other debts or to plan a vacation. Your beneficiary will get the death benefit tax free which is reduced by the amount you borrowed and the interest on it. You use your money while you are alive to maintain your life style and your beneficiaries will get the balance money after your death to take care of your final expenses and rest in legacy.
