Insurance Read Time: 3 min

Financial well-being for everyone: Affordable whole life

If you could provide permanent financial protection for your family in case of an unforeseen crisis, would you? For most people, the answer is a quick “yes.” Yet sometimes people are slow to act on this seemingly good idea. Take life insurance, for instance. In theory, everyone wants to have a financial safety net for their loved ones, but approximately 60 percent of Americans believe they can’t afford life insurance. And, nearly the same number overestimate the cost by three times — it’s time to dispel the myth that life insurance is out of reach.[1]

Term vs. Permanent Life Insurance

Life insurance commonly comes in two varieties: term and permanent (or whole life). Term life insurance covers you for a set period of time — say, 10 years — while permanent insurance has no expiration, as long as you pay your premiums.

Accessible Life Insurance

Traditionally, people mistakenly believed permanent life insurance was solely for business professionals well into their careers, as it was a more expensive option. Now, people across professions and life stages are becoming aware of the benefits of protection that never expires — and that can even help you grow your savings.

With these people in mind, many insurers are now offering entry-level-type whole life insurance policies, ranging in coverage amounts and at an affordable monthly premium. Plus, premium amounts stay the same throughout the policy, even as you age or if your health changes.

Life Insurance Can Also Accrue as a Cash Asset

People are correct in thinking of life insurance as a way to give your loved ones financial protection. But there’s an important additional benefit to whole life insurance: the cash value. As you pay the monthly premium, the money accrues as a cash asset.2,3,This money can help pay for major purchases, like buying a house or taking a vacation, or for unexpected events, like an elderly parent in need of home health care services.

Some policies even offer a terminal illness rider.5 With this addition, often at no extra cost, you and your family can access your life insurance coverage if you’re diagnosed with a terminal illness. In this case, you’re able to use the money to pay for health care and other expenses, lessening the potential financial burden for your family.

Insurance Applications Are Now Easier, Too

Insurance is evolving by embracing the ease of digital processes, like online applications. In the past, providers may have required tedious paperwork, including lab work and medical exams, before confirming a new policy. But today, most people do everything on their phones, tablets or computers, and thankfully, this can include applying for insurance.

Getting life insurance has been digitally streamlined, and many of the traditional steps are no longer needed. Application times still vary based on a person’s overall health, but often candidates can get same-day approval.

No one likes to think about worst-case scenarios, especially when you’re young and healthy. But the unexpected happens, and it’s best to be prepared. And with the new whole life insurance products available, for a minimum monthly cost, now you can be. A financial professional can help you decide on the best policy for you based on the latest options.

1 Facts About Life 2021, Life Insurance Marketing and Research Association, Sept 2021

2 Some whole life polices do not have cash values in the first two years of the policy and don’t pay a dividend until the policy’s third year. Talk to your financial representative and refer to your individual whole life policy illustration for more information.

3 Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable withdrawal may also be subject to a 10% federal tax penalty.

4 All whole life insurance policy guarantees are subject to the timely payment of all required premiums and the claims paying ability of the issuing insurance company. Policy loans and withdrawals affect the guarantees by reducing the policy’s death benefit and cash values.

5 Riders may incur an additional cost or premium. Riders may not be available in all states.

Brought to you by The Guardian Network © 2022. The Guardian Life Insurance Company of America®, New York, NY.

2023-164949 Exp. 11/2025 *pre-approved content*

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