Best Whole Life Insurance Companies

Whole life insurance can be a prudent choice for people who want to stay insured throughout their life. It also offers several other benefits that term life insurance does not.

In this article, we take a look at the benefits of whole life insurance, the different types of whole life policies available, the factors to consider while buying whole life insurance, and the best whole life insurance companies in the industry today.

Top Five Whole Life Insurance Companies

MassMutualmass mutual logo

Established In: 1851

A.M. Best: A++

Moody’s: Aa2

Standard & Poor’s: AA+

Fitch: AA+

New York Lifenew york life logo

Established In: 1845

A.M. Best: A++

Moody’s: Aaa

Standard & Poor’s: AA+

Fitch: AAA

MetLifemetlife logo

Established In: 1868

A.M. Best: A+

Moody’s: Aa3

Standard & Poor’s: AA–

Fitch: AA–

Northwestern Mutualnorthwestern mutual logo

Established In: 1857

A.M. Best: A++

Moody’s: Aaa

Standard & Poor’s: AA+

Fitch: AAA

Guardian Lifeguardian life logo

Established In: 1860

A.M. Best: A++

Moody’s: Aa2

Standard & Poor’s: AA+

Fitch: AA+

All five of these companies are financially very stable, have a very good track record in terms of claim settlements, and have been in the industry for well over a century. They also offer a wide array of policies along with riders, which you can compare with each other and pick one that meets your budget and needs.

Why Choose Whole Life Insurance over Term Life Insurance?

Lifelong Coverage

Term insurance, by definition, has a fixed term, which could be anywhere from 10 to 30 years. Once it expires, you have two options.

  • You can stay uninsured for the rest of your life, which is only possible if you do not have any financial obligations or people who are financially dependent on you.
  • You can apply for a new policy, which you might find difficult to qualify for owing to your age and health condition. Even if an insurer accepts you, they are likely to charge a higher rate compared to what you previously paid for your policy.

This is not an issue at all with whole life insurance, since it offers lifetime coverage for the policyholder. You will stay insured as long as you keep making the premium payments. It can be very beneficial, especially if you happen to have a spouse who does not work and is financially dependent on you.

Financial Benefits

Term life insurance has a death benefit, which your beneficiary will receive after your passing. Other than that, there are no living benefits associated with a term life policy.

Whole life insurance, on the other hand, not only has a guaranteed death benefit, but also has a cash value component. A portion of the premiums you pay is allocated to the cash value component, which earns interest throughout the term of the policy.

The cash value component is similar to a savings account, which you can tap into in case you are in need of money. You can either withdraw money or take out a loan from the cash value component.

The amount you withdraw is tax-deferred, as long as it does not exceed the premiums you have paid into the policy. If you take out a loan, on the other hand, you have to pay it back with interest. In case you fail to do so, the outstanding amount will be deducted from your death benefit.

Many whole life insurance companies also pay you dividends on an annual basis. These companies distribute a portion of their profits evenly among all the policyholders. Some policies offers guaranteed dividends, which means you will be paid dividends every year. Some other policies offer non-guaranteed dividends, which means you will be paid dividends only when the company makes sufficient amount of profits. The dividends you receive from your whole life policy are also tax free.

In essence, whole life insurance offers you lifelong coverage and provides living benefits like cash value and dividends, which are not available with term life insurance. So, despite the fact that it costs more, a whole life policy is a better choice for you in the long term compared to a pure term policy.

Now, let us take a look at the different types of whole life policies available.

Different Types of Whole Life Policies

Non-Participating

A non-participating whole life policy is the simplest and also the most affordable choice for you. It usually has two components – a death benefit and a cash value component which accrues interest at a fixed rate. The premiums remain the same throughout the term of the policy.

It is called ‘non-participating’ because you, as an individual policyholder, are a non-participant in the investment activities of the company. So, you will not receive any dividends from the profits the company makes.

Participating

It has three components – a death benefit, a cash value component which grows at a fixed rate, and dividends which are paid out on an annual basis. As a participating policyholder, you are technically one of the owners of the insurance company, which means you are eligible to receive a share of the profits the company makes.

Participating whole life policies typically have a higher premium than non-participating policies.

Economic

This is similar to a participating whole life policy, wherein you receive dividends in addition to the death benefit and the cash value component. The difference, however, is that the dividends are used to buy additional coverage on your existing policy. So, every time the company pays dividends, your death benefit increases.

The only downside is that if the insurance company’s performance is exceptionally poor, your death benefit might get reduced.

Level Premium

In this type of policy, the premiums stay the same throughout the policy period. You have to pay the exact same amount every month for as long as you are insured.

Single Premium

This type of whole life policy requires you to pay the entire premium amount in a lump sum. A significant portion of your payment is allocated to the cash value component, which continues to grow at a steady rate throughout the term of the policy.

Indeterminate Premium

In this type of policy, the premium does not remain the same, but changes from time to time depending on the insurance company’s performance. If the company performs well, they charge you a lower rate.

If they perform poorly, they charge you a higher rate. It should be noted that these policies usually come with a guaranteed maximum premium. No matter how badly the company performs, your premium payments will not exceed the guaranteed maximum amount mentioned in your policy.

Limited Payment

This type of policy limits your premium payments to a shorter term, within which you have to pay the entire premium amount. The timeframe depends on the policy you choose and the terms of the insurer.

The advantage of this policy is that you can pay off the full amount of your policy in 10 or 15 years and do not have to worry about making monthly or yearly payments for the rest of your life. The disadvantage is that the premiums are usually higher compared to a regular whole life policy, due to the shortened payment schedule.

Interest Sensitive

In this type of policy, the cash value component is linked to market conditions. If the market performs well, the cash value grows at a faster rate.

If it does not, the cash value grows at a slow rate. Similarly, the premiums are linked to the insurance provider’s performance. If the company performs well, you will be charged a lower rate. If it does not, you will be charged a higher rate.

Just like indeterminate whole life policy, this one too has a maximum guaranteed premium, which is the highest rate the company can charge you irrespective of market conditions and its performance.

Factors to Consider While Buying a Whole Life Policy

Death Benefit

The amount of death benefit you need depends largely on your age. If you are young, you might want to provide your beneficiaries with a lot of money in the event of your untimely death.

In which case, you should calculate the coverage you need by taking into account various factors including your mortgage, children’s education, and any other financial commitments you might have.

In case you are older and need money for your retirement years, you might require a relatively smaller amount, since you are not likely to have any major ongoing financial obligations after your retirement.

If you are in your 60’s or 70’s and do not have any financial obligations or anyone who is financially dependent on you, you might need a policy only to cover your funeral expenses and to pay off small amounts of debts and outstanding bills, if any.

Approval Process

If you are young and in good health, you should choose a fully underwritten whole life policy, which usually includes a comprehensive medical exam. It is the best way for you to find the lowest possible life insurance rates, since you are most likely to be accepted in the Preferred or Preferred Plus category.

If you are older and have health issues, you might still want to apply for a fully underwritten policy, since some insurers have relatively lenient underwriting guidelines. If you do not qualify, you can opt for a simplified issue policy (which requires you to answer a number of health-related questions, but no medical exams) or a guaranteed issue policy (no questionnaire, no exam).

Premium Rate

Whole life policies are typically more expensive than term policies, but it does not mean that you cannot find an affordable policy. The premium rates usually vary from one insurer to another, so ask for multiple quotes, compare them with each other, and choose a policy that is relatively cheaper than the rest.

Premium Payment Schedule

Are you okay with making monthly payments for the rest of your life? If so, a regular, level-premium policy should be a good choice for you. If not, you should press the button for a limited payment policy with a shortened payment schedule or a single premium policy.

Cash Value Interest Rate

The cash value component in your policy usually grows at a fixed rate, which is predetermined by the insurance company. So, ask for quotes from multiple companies and choose the company that pays a relatively higher interest rate.

If you are young, have a steady source of income, and are not likely to dip into the cash value component, you could open the door for a policy which has a cash value component with a variable interest rate, which is linked to market conditions.

If you are older, it might not be a good option for you, since you need the cash value component to grow at a steady pace in your retirement years, which is when you might need it the most.

Why does the Financial Rating of an Insurance Company Matter?

One of the key factors you should take into account while buying whole life insurance is the financial rating of the company.

The financial stability of a company matters the most because insurance, by definition, is a long term commitment. So, it is advisable to choose a company with strong fundamentals and is likely to be around for a long time from now. The best way to determine the financial strength of an insurer is to check their financial ratings.

Agencies like A.M. Best, Standard & Poor’s, Moody’s, and Fitch rate insurance providers based on their assets, cash flow, statutory reserves, and long term financial outlook.

Insurance companies that consistently receive high ratings from these agencies are likely to be financially very stable and have the capacity to meet all their commitments – both in the short term as well as long term.

Which Whole Life Policy Is the Right Choice for You?

There are several types of whole life policies available for you to choose from, as explained above. You can choose the right type of policy for you based on a number of factors including age, income level, financial needs, and number of dependents.

If you are young, you can choose a policy whose growth is linked to market conditions, since you can afford to take risks. If you are older and averse to taking risks, you can choose a policy whose cash value grows at a steady rate.

No matter which type of whole life policy you decide to buy, make sure you get quotes from different companies and choose the best offer – both in terms of cost and the benefits offered.

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It is essential for you to buy life insurance if you have a spouse, children, or parents who are financially dependent on you. It allows you to secure the financial needs of your loved ones and make sure that they can cope with the loss of your income – in the event of your untimely death.

What is equally important is choosing a reliable life insurance provider. Life insurance, by definition, comes into effect only when you are gone.

You have to trust the company to deliver on its promise of paying your family after your passing. So, the reputation and track record of the company you choose should be good enough for you to place your trust in them.

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Life Insurance Payouts and Taxes

Life insurance is one of the best ways to secure your family’s financial needs in the event of your untimely death. It essentially acts as a financial safety net and helps your family cope with the loss of a steady income source.

One question that often pops up while discussing the subject of life insurance is – is the death benefit taxable?

It is entirely understandable, as most people are not thrilled with the idea of giving away a significant portion of the insurance payout to the government, especially at a time when they need it the most.

In this article, we take a detailed look at the tax implications of life insurance policies.

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Finding the Most Affordable Life Insurance Companies

cheap priceChoosing an affordable life insurance policy that meets your financial needs can be a difficult task. Not only do you have a wide range of options to choose from, but you also have to consider a number of factors before zeroing in on a policy.

To make your job easier, we at noexam.com have prepared this guide to help you choose a low-cost insurance policy that is best suited for your budget and needs.

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Whole Life Insurance

Whole life insurance is a type of permanent life insurance that offers coverage for you throughout your life. If you are diligent with paying your premiums, a whole life policy will provide you coverage until the last day of your life.

Among the various types of permanent life insurance policies, whole life insurance is the most common. The American Council of Life Insurers (ACLI) reported that out of all policies sold to individuals in the US in 2014, 63.7% were whole life policies.

What are the reasons for the wide popularity of whole life insurance? A clear knowledge and understanding of this insurance policy and its benefits and limitations should provide you with a fair perspective to make your best decision for buying life insurance.

Key Elements of Whole Life Insurance

To comprehend the benefits of a whole life policy, you should first understand its key elements.

Permanent Coverage

In the case of a term life insurance policy, the coverage term is fixed—for example 30 years. This means, that the policyholder may outlive the policy duration. If the policy has already expired, then the insurance company will not pay any death benefits to your beneficiaries after you.

This concern is avoided in whole life insurance, which remains active until your last day, provided you didn’t default on your premium dues. This increases the chances of your beneficiaries receiving the final payout.

Fixed Premiums

Most permanent life insurance policy premiums are fixed amounts. This means that you pay the same rate from the beginning of the policy term to the end. The advantages of fixed premiums are:

  • The premium amount you need to pay in the future is not uncertain or unknown. Therefore, you need not worry whether you can afford future premiums or not.
  • Budgeting for future premium payments and your personal financial planning becomes easier.

Cash Value

In majority of whole life policies, a portion of the premium you pay is accrued to a cash value account.

  • This amount grows into a corpus with time.
  • You can even withdraw or take a loan against this accumulated savings.

This additional saving feature of the whole life insurance distinguishes it from term life insurance.

Who Should Buy Whole Life Insurance?

The whole life insurance policy suits almost any individual who wants to have lifelong insurance coverage. On the face of it, you might think that whole life insurance suits virtually everyone.

However, that need not always be the case because under certain circumstances, individuals may not be in need of full life protection. Sometimes people take life insurance for short-term coverage for various reasons.

  • Consider the case of someone walking down the avenue towards life coverage against student loans or mortgage. Both these loans have fixed terms and a term insurance could be a cheaper and more useful option in this case.
  • Anyone may want to have coverage for their final expenses. Both term and whole life coverage can be used for this.
  • In some cases, due to their diverse needs, people choose a combination of both term and whole life insurance.

Your chosen course of action depends upon your answer to a key question: “How much life insurance do I actually require?”

Even though the two policies are unrelated, you will find that whole life policy premiums are roughly 10 times that of term life insurance policies for the corresponding periods. Whole life insurance could prove to be less cost-effective option for some people (particularly for older persons).

For whole life insurance policy, you should ideally have a steady source of income to pay the premiums comfortably. If for some reason, you are unsure of your future income or expenses, you might be better off choosing a term life or a universal insurance policy.

Types of Whole Life Insurance Policies

Different people may have different goals when they buy a whole life policy.

  • Meeting expenses – The payouts as well as borrowings taken against the whole life policies may be used to meet both expected and unanticipated expenses.
  • Large payouts – The substantial death benefits protect your beneficiaries from financial burdens when you are no longer there.
  • Access to funds – As a saving for your retirement years and emergencies, the whole life corpus acts as a safety net for your immediate and long term future.

Based on their personal needs and goals, people may choose from the following whole life insurance policies:

Universal

A part of the premium paid under this policy is accumulated in a cash value account. The policyholder can access this account and borrow from this corpus (take a loan).

The cash value accumulation helps in two ways:

  • The amount in this account is tax-free.
  • You need not repay a loan taken out of this account. The unreturned amount is, under most circumstances, deducted from the final payout value and only the balance is paid to the beneficiaries.

This cash value account can serve as your contingency access fund and help you during any unforeseen emergency—for instance, a health related emergency. During your later years, you could also use it to supplement your post-retirement income.

Variable

Here, the cash value portion of the premium is reinvested into various sub-accounts—much like mutual funds. Unlike the Universal whole life policy, where the buildup of premiums lead to fund accumulation in the cash value account, in the variable whole life policy, the accrued value grows at the rate at which each sub-account is growing.

You can make withdrawals from this cash value accumulation as well. The only difference is that the rate of accumulation will vary for both types of whole life policies.

Guaranteed Issue

The medical status of the individual to be insured will usually have a direct bearing on the premium he or she needs to pay for their whole life insurance. A person with significant health complications may end up paying higher premiums. In extreme cases, they may be denied insurance.

Most guaranteed issue polices do not require medical underwriting. This means that the policy premium is independent of the policyholder’s health condition. The medical exams mandatory for other policies are waived for this category of whole life insurance.

None of the buyers of this insurance, irrespective of age or health condition, are required to undergo a medical exam.

Survivorship

In most cases, death benefits of a life insurance policy are paid out in the event of death of the insured. Each policy offers coverage to only one persons’ life.

However, Survivorship insurance is a unique variant of life insurance that covers two individuals—most often a married couple. The beneficiary of such a policy will receive payout only after both the insured die. While even one of the insured survives, the policy continues to be active.

Single Premium

Most life insurance policy premiums are paid at fixed intervals—monthly, annually etc. But depending on your needs, you may even consider single premium permanent life insurance. For such policies, a substantial sum is collected upfront in lieu of premium. This single premium amount can be quite large, but it spares you:

  • Any worries about being able to afford premium payments for a prolonged period—literally your entire life.
  • The risk of missing out on a premium payment.

Graded Premium

In this type of whole life insurance, the premium amount increases with time. The lower early premiums can match the potentially lower incomes of younger persons. With time, as the policyholder’s income grows, so does the premium amount. This staggered approach makes the whole life insurance more financially prudent and affordable many younger persons.

Advantages of Whole Life Insurance

The whole life insurance policy is not for a fixed duration like the term life plan. It’s for your whole life.  But do you know that whole life policies are not necessarily limited to the death benefit alone?

Before selecting a life insurance plan, you should consider all the options available to you. Here is a brief compilation of the potential financial gains you can expect from a whole life insurance policy.

1. Guaranteed protection

The accumulated cash value of your policy is unaffected by any stock market upheavals. In most cases, the accumulation is through periodic premium accrual that is independent of stock market movements.

2. Growth of cash value

Your policy’s cash value grows at a fixed rate, independent of stock market climbs and reversals. Therefore, whichever way the market swings, your cash value account will grow at a steady rate.

3. Additional income

If you wish, you can exchange your whole life coverage for an annuity from which you can earn a steady income for life. This exchange will not draw any taxation. But before you make the swap, consult a registered financial consultant or a tax expert for advice. A professional will be better placed to assess what your actual needs are.

4. Potential source of funds

During your lifetime, if you need additional funds to meet some important expenses, you can make use of your whole life insurance’s accumulated cash value. You can take a loan from this amount and repay later. But you should remember that:

  • Interest will accumulate on your payout due to the loan.
  • Your unpaid loan amount will be adjusted against the death benefits and only the difference will be paid to your beneficiary.
  • The loan amounts are tax exempt.

5. Annual dividends

Some insurance companies will share a part of their annual profits with you, as annual dividends paid for the whole life insurance. The dividend amounts are variable and depend upon the profits earned. You may use dividends to purchase additional coverage. This could help you to:

  • Increase your sum assured
  • Augment the accrued cash value
  1. Surrendering for cash value

Many unforeseen adverse financial situations can befall a policyholder during their lifetime. These may include:

  • Retrenchment
  • Losses in business or investment
  • Chronic illness
  • Cash crunch

In these situations, if the policyholder is in urgent need of money, he or she may surrender the whole life policy in return for the cash value accumulated until then. Some charges may be deducted before the accrued amount is paid to the policyholder. Once surrendered, this policy ceases to exist.

  • You need not pay any further premiums after policy surrender.
  • No death benefit can be claimed by beneficiaries named in the original policy.
  1. Retirement savings vehicle

Single premium whole life insurance policies can be a solid retirement saving vehicle. It serves three purposes:

  • Protects their families from financial burdens, in the event of their death
  • Acts as a contingency financial relief option
  • Interests and dividends earned are tax-exempt, increasing the amount available for compounding. The corpus grows faster than other savings options due to these reasons.

Limitations of Whole Life Insurance

  • Whole life insurance has a few complex dimensions. For instance, you can borrow money from your accumulated cash value only after being insured for a fixed duration. This pre-condition is mainly to ensure that some funds accrue before your withdrawal.
  • Your policy will lapse if the sum of your outstanding loan and its accumulated interest amount exceeds the cash value of your policy. So, be very careful when you take out any loan against the accumulated amount.
  • When you take a whole life policy, you commit to make regular premium payments for a lifetime. If you miss this obligation, your policy savings may be penalized. Prolonged default may lead to policy being canceled.
  • The premium amount payable under the whole life insurance is higher than that of term life. Even though during the initial years premiums are costlier, whole life insurance can be cost-effective, if obtained early in life.

The main objective of any life insurance policy is to protect your loved ones from financial distress after you are no longer there. Both term life and whole life accomplish this. Some people may prefer a combination of both. Before you decide which one to choose, make sure that you know:

  • Benefits and limitations of both
  • Key features of both
  • How each will help you and your family

Term Life Insurance vs. Whole Life Insurance

Salient Features of Term Life Insurance

  • Payout only in case of death.
  • No benefit if your policy term expires before your demise.
  • Easy on the pocket and uncomplicated to purchase.
  • Policy valid for fixed term—for instance, 5, 10, 15, 30 years, etc.
  • Premium increases with age; especially high for persons above 50.
  • You have to renew the policy if you need coverage beyond its term.
  • Could serve as a provisional protection to augment permanent life insurance coverage.
  • Convertible into whole life insurance.

Salient Features of Whole Life Insurance

  • Lifetime coverage.
  • Dual benefit of sum assured in case of death as well as cash value from premium accumulation.
  • Medical clearance mandatory, in most cases.
  • If purchased without medicals, cost even higher.
  • Requires 12 – 15 years for cash value to build.
  • A good estate planning instrument.
  • Cash value varies with the changes in value of return on investment of its underlying asset.
  • You can withdraw / borrow a part of the accumulated cash value, while the policy is in force.
  • Premiums are higher than that of term life insurance, especially during the initial years. But staying invested for decades can offset this cost and make it more economical.

Which is better: Term Life or Whole Life?

How do you choose between the two? There are many variables to consider. You need to consider multiple aspects of your life for this decision and having an insurance agent walk you through the process is recommended. Before you make the choice, you must consider the following factors:

  • Your present age.
  • Your present health.
  • Your family’s financial needs.
  • Estimated cost of funeral and similar expenses.
  • Your children’s age.
  • Expenses in case of serious long-term ailments.
  • Your outstanding loans and mortgage amounts.
  • Your retirement and post-retirement plans.
  • Your family’s expected future financial needs—for example children’s’ college education.
  • Do you need additional savings for your retirement?
  • Your views on setting up a estate and how taxation will impact such an estate.
  • Will you be setting up a trust as part of your will?
  • Your views in donating life insurance proceeds.
  • Your opinion about perpetual term life premiums that offer no payback except in death.

For example, if your age is 32, your family includes children in kindergarten and you are the only wage earner in the family, a term life insurance that protects your family’s financial needs may suit you best.

In the event of your premature demise, what kind of financial safety net would your family need? To know this, you should consider the following expenses:

  • Annual living costs of your family
  • Mortgage payments
  • Other outstanding debts
  • Children’s long term education expenses

You may want the duration of your policy to match with the time your children might take to complete college. In such case, term life insurance may be the right choice.

On top of this, you could choose a whole life insurance policy with the same sum assured. With this insurance:

  • All your family’s financial worries would be taken care of, just as in the case of term life.
  • In addition, the accumulated cash value would be a key benefit.
  • During your life, the same corpus will serve as your financial safety net for emergencies.

A few years down the line, you may even choose to convert a part of your term life coverage into whole life, for additional retirement savings. But what if the whole life insurance premiums are proving to be a burden in your current financial situation? All these possibilities require careful consideration along with an evaluation of your financial goals.

Converting from Term Life to Whole Life

Converting a term life insurance policy into any permanent life insurance, including whole life, is normally permitted. Under what circumstances will this be the right course of action? Some situations in which this conversion may be useful include:

  • You are already in your fifties or sixties and your term life policy is due to expire.
  • You want to continue your coverage but due to your age or other factors, term life appears expensive or unavailable.
  • You plan to set up an estate, but the significant estate taxes bother you.
  • Your will includes a trust.
  • You are looking for tax-free investment options.

Converting your term life to whole life can help you:

  • Enjoy extended coverage
  • Build a reserve cash corpus to use for future borrowing

Your needs and objectives will determine how you structure and manage your policy. You may seek advice for an experienced insurance agent in order to make a salient choice which best addresses your situation.

Buying both Term Life and Whole Life

You can simultaneously own both kinds of life insurance. In most cases, persons who consider this option would already own a whole life policy. Any short-term need for additional coverage could trigger the demand for a supplementary term life insurance. The duration of the term life coverage will match the duration of the additional risk.

In some instances, you may already own a term insurance policy and are interested in whole life insurance an investment option:

  • For retirement savings
  • For estate benefits

Cash Value and Death Benefit in Whole Life Insurance

The beneficiary receives the sum assured while the insurance company absorbs the cash value.

  • Whole life insurance guarantees death benefit, irrespective of when you die, because other than in extraordinary circumstances, the policy remains active for the duration of your life. But term life benefits are payable for a fixed duration only.
  • Whole life has an additional benefit of accumulated cash that you can withdraw or take a loan from.
    • If you withdraw, the death benefit will be reduced by that sum.
    • Your withdrawal is taxable at your regular rate of income tax.
  • Once your policy is “paid up”—i.e. your cash value has accumulated enough to allow loan, withdrawal etc.—you can use it to pay your whole life insurance premiums.

When you tap into the cash value, take care to ensure that the death benefit is not depleted too much. Also, be careful to keep your tax burden within limits while withdrawing.

Some experts have a counter-argument that leaving too much of a corpus is ill-advised because only the insurance company gets to use it. Having a surplus cash accumulation during your younger days makes good economic sense. The fund acts as a reserve for unanticipated expenses.

But in later years, if you find your policy has plenty of cash, you consider talking to your insurer for a greater face value amount, citing the cash value. In this manner, you can make sure that:

  • The cash value doesn’t run to waste. Otherwise, the insurance company will only benefit from the accumulated sum set aside from the premiums you paid.
  • Your beneficiary will receive a larger payout.

Seek help from an experienced life insurance agent to determine your best options.

Important Riders to Consider

While buying your whole life insurance policy you might wish to incorporate the following riders.

Waiver of Premium Rider

In the event of your being unable to work due to a permanent disability or illness, your premiums may be waived. This is applicable for instances such as:

  • Amputation
  • Paralysis (full or partial)
  • Spinal injuries
  • Loss of eyesight

The level of disability that triggers this rider varies across insurance companies. But, having the rider can ensure that your policy doesn’t lapse and your family receives the sum assured someday.

Imagine a situation where you lost a limb and were incapacitated for months. You would have:

  • Large unpaid medical bills due to the emergency
  • All regular living expenses to be met but no income to bear these expenses
  • Mortgage and other debts that require regular payback

You have to be able to handle these expenses despite being unemployed. In this type of situation, the premium waiver would be most convenient. That is one commitment you can strike off your list.

Critical Illness and Terminal Illness Riders

Moreover, another name for this is accelerated death benefit rider, which gives you the benefit of receiving a portion of your policy’s death benefit, upon being diagnosed with a terminal illness. In most cases, this rider may be free or very economical because its terms of applicability can be very stringent.

  • The percentage of benefit paid in advance can be below 50%.
  • Definition of terminal illness varies from one policy to another.
  • Benefits paid along with interest could be taken out of the face value of the policy.

Critical care rider is also along the same lines. You can utilize an early partial payout from your death benefit if you are diagnosed with an illness that requires prolonged intensive treatment.

For instance, if you suffer a stroke because of which you need constant nursing care, you can take the premature partial payout to pay your medical bills.

Since the decision to take advantage of or forego this benefit remains with you, you can opt-in for this rider if your insurer gives it free of cost. But, if it’s not free, then decide after going through the terms and conditions in detail. Make sure that you understand the conditions under which this rider will apply before going for its paid variant.

Tax Consequences of Whole Life Insurance

  • The death benefit is exempt from tax. Just as in the case of term life insurance payouts, the lump sum paid to your beneficiaries in the event of your demise is not taxed.
  • Using prudent measures, you can avail tax-free loans issued out of your death benefit. You can forego repayment as well, if you plan properly. This loan can fund expenses such as:
    • College education of children
    • Augmenting retirement income

Do exercise extreme caution with these loans. The same borrowing when poorly managed can become taxable—often when you need the tax break most. Taxation happens if:

  • Your policy lapses
  • You surrender your policy

Top Companies Selling Whole Life Insurance

For a more in depth look at whole life insurance companies, see our guide to the best whole life insurance companies.

Guardian Life Insurance

  • In certain types of the whole life policies, the rate of accumulation of cash value may be linked to the Standard & Poor’s 500 Index.
  • On every 10th anniversary of your policy, you can attain the loan option at both fixed and floating rates.
  • History of dividend payments to policyholders.

MassMutual

  • Guarantee against rejection on medical grounds—i.e. no medical test needed—for 50 to 75 year old persons who opt for coverage of $2,000 to $25,000.
  • Medical exam mandatory for policies with higher sum assured.
  • May earn dividends.

Mutual of Omaha

  • Three offerings in whole life insurance with diverse features and payouts.
  • Medical examinations not required.
  • Based on chosen policy type, sum assured ranges between $3,000 and $50,000.
  • Whole life insurance for children as well.

New York Life

  • Types of whole life insurance include:
    • Standard policy variant
    • Customized policy for accelerated cash value accumulation
  • May earn dividends

Northwestern Mutual

  • Offerings include:
    • Standard whole life insurance
    • CompLife—combination of term and whole life insurance
  • Premium payment durations can be:
    • Until 65 years of age
    • Until 90 years of age
    • For policy periods of 10 to 30 years
  • Dividend payout option

Ohio National Life Insurance Company

  • Four offerings with diverse premium payment terms
  • Dividend payment option
  • Exclusive option of $10,000 for final expenses for persons aged 50 to 80

Transamerica    

  • Sum assured range – $2,000 to $50,000
  • Three options for final expense policies

Whole Life Insurance – Application Process

  • You have to furnish your basic details in the application. This includes:
    • Your name
    • Contact details
    • Employment details
  • Some personal information will also be requested, such as:
    • Height
    • Weight
    • Date of birth
    • Personal habits (i.e., smoking, alcohol consumption, workouts)
    • Financial details—your yearly earnings and net worth

Resist any temptation to lie about your height or weight or health condition. Disclosing accurate facts is vital. If at any point during your policy application or later, the insurer discovers that you misrepresented any of the information, especially the details pertaining to your health, the company could:

  • Raise your premiums
  • Cancel your policy
  • Deny your beneficiary’s death benefit claim

Some insurance companies will accept your responses (provided in the application) related to your health condition. But most insurance companies will mandate a medical examination by an authorized individual. A life insurance agent can make the necessary arrangements for you to meet a paramedic at a place of your choice—your home, office, or a medical center specified by the insurance company.

Key Takeaway

Each individual has a unique situation. The choice of insurance company, the type of whole life insurance policy, and the policy amount would vary for different people. What may be the best for one person may not necessarily be the best for another.

So carefully consider your personal and family situation and your overall financial goals, and then make an astute buying decision for whole life insurance with the guidance of a proven and reliable life insurance agent.

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Globe Life Insurance Review & Rates

globe lifeGlobe Life Insurance is one of the most recognizable names in the insurance industry today, despite the fact that the company has been around for just over six decades.

The company is known for its ‘no medical exam’ policy, which appeals to a section of consumers – particularly middle-aged folks and senior citizens.

In this review, we take an in-depth look at Globe Life Insurance, the policies they offer, the rates and the overall strengths and weaknesses of the company and their products.

How NoExam.Com Can Help You?

Choosing the right insurance provider is not an easy task at all, given the wide range of options available for you.

If you choose the wrong policy or an unreliable provider, you could not only end up wasting your money, but your family could be left without adequate financial protection after your passing. This is where noexam.com can help you.

At noexam.com, you can find a variety of information on the top life insurance companies in the market today and the products they offer. We aim to link you with the insurance provider of your choice by offering you all the data you need to make a poignant decision.

About Globe Life Insurance

Globe Life and Accident Insurance Company, better known as Globe Life, is a Texas-based insurance provider. Founded in 1951, the company has managed to carve a niche for itself in the industry over the past six decades.

Globe Life started off by catering to the insurance needs of rural communities in Oklahoma. Today, the company has managed to expand its presence across the country and has become a reliable and reputed name in the industry.

The company currently has over 4 million policyholders and has $80 billion of life insurance in force.

Globe Life is a wholly-owned subsidiary of Texas-based Touchmark Corporation, which is a holding company for a number of other insurance companies including American Income Life, National Income Life, United American, Family Heritage Life, Liberty National, and Globe Life Insurance Company of New York.

Financial Rating of Globe Life

Globe Life has an A.M. Best rating of A+, which is the second highest rating offered by the company. It also has an AA rating from Standard & Poor’s. These ratings are a strong indicator of the company’s financial strength and stability.

Apart from this, Globe Life also has a BBB (Better Business Bureau) rating of A+, which is a sign that a large section of their consumer base is satisfied with their services.

The Policies Offered by Globe Life

Globe Life offers term life, whole life, as well as accidental insurance policies.

Globe Term Life Insurance

Globe Life’s term life policy allows you to choose the death benefit payout depending on your needs. Your options include $5,000, $10,000, $20,000, $30,000, $50,000, $75,000, and $100,000. There are no medical exams involved and the death benefit stays the same as long as the policy is in effect, so you do not have to worry about the amount getting reduced for any reason.

The rates for Globe term life policies, irrespective of the death benefit amount you choose, starts at $1. This is, however, only for the first month. From the second month onwards, your premium increases, depending on your age and the death benefit amount you choose.

Globe Life’s term policies are age-specific and are designed to be renewed in five-year increments. For example, if you purchase a policy at the age of 31, you have to renew it at the age of 36, at which point your premium also increases, since you move to a different age bracket.

Globe Whole Life Insurance

Globe Life’s whole life policy offers you five different options in terms of death benefit payout – $5,000, $10,000, $20,000, $30,000, and $50,000. There are no medical exams involved and the death benefit remains the same throughout the term of the policy.

The rates for Globe whole life policies starts at $1 for the first month and increases in the second month, depending on your age and the death benefit you choose.

The premium you pay from the second month onwards, however, remains the same throughout the duration of the policy. Unlike the company’s term life policies, there are no age-based five-year increments in premium payments.

Globe Life’s whole life policies have a small cash value component, which grows at a steady rate throughout the policy’s term. You can borrow against the cash value component to meet your emergency expenses, if and when needed.

It is similar to a personal loan and needs to be repaid within an appropriate amount of time. If not, the outstanding amount as well as the interest owed would be deducted from the death benefit.

Whole life policies are meant to last your entire life, so there is no predetermined expiry date for them. The policy stays in effect as long as you keep making the premium payments.

Children’s Whole Life Insurance

Globe Life also offers a whole life policy for young children. The coverage amount ranges from $5,000 to $10,000, $15,000, and $20,000. The policy includes a cash value component, which accrues interest throughout the term. The cash could be accessed for emergency purposes, but it could deplete the death benefit payout unless it is paid back in full with interest.

The premium for the policy starts at $1, which is only for the first month, after which the rate schedule is revised and the premium increases depending on the policyholder’s age. Once revised, the premium stays the same throughout the duration of the policy.

The death benefit and the growth rate of the cash value component also stay the same throughout the policy’s term, irrespective of the policyholder’s age, health condition, or occupational status. Also, there is no waiting period, since the coverage starts from day one.

Accidental Insurance

Globe Life’s accidental insurance policy is available for anyone from 18 to 69 years of age. It is a ‘guaranteed acceptance’ policy, which means if you are within the age limit of 18 – 69, you will not be turned down for any reason. There are no medical exams involved and you will also not be asked any questions regarding your health condition.

Accidental insurance, as the term indicates, is meant to cover the financial needs of your family only if you pass in a vehicular accident. The terms of the policy do not apply if the death is caused as a result of any other factor.

As is the case with all other Globe Life policies, the premium for the accidental insurance policy also starts at $1. After the first month, the premium amount is revised, based on your age and your policy’s death benefit payout. Once revised, the premium is locked in and remains the same throughout the duration of the policy.

Globe Life accidental insurance is also available for families. The Family Plan offers additional death benefits to your spouse and child. For instance, if your death benefit payout is $100,000, your spouse gets $50,000 and your child receives $10,000.

The policy also has a number of additional features including

Inflation Benefit – The death benefit increases by 5% every year for the first five years or until you turn 70, whichever is earlier.

Education Benefit – An additional 10% of the death benefit is paid to each of your children who are between the age of 15 and 22. The amount payable is capped at $10,000. The feature is limited to the Family Plan and not available on individual accidental insurance policies.

Seat Belt Benefit – If your death is caused as a result of a vehicular accident, and if you were wearing a seatbelt at the time, your beneficiary gets an additional 10% of the death benefit.

Dismemberment Benefit – If you lose your eyesight or a limb due to an accident, you receive a payout which is calculated based on the extent of the injuries you suffer and the loss of mobility caused as a result.

Paralysis Benefit – If you suffer from paraplegia, hemiplegia, or quadriplegia (partial or full paralysis) due to an accident, you receive a payout which is calculated based on the loss of mobility caused as a result.

Commercially Scheduled Airline Accident Benefit – If your death is caused as a result of an accidental bodily injury you suffered while onboard a commercial flight, your beneficiary is paid an additional 100% of the death benefit.

Now, let us take a look at the advantages and disadvantages of choosing Globe Life as your insurance provider.

Advantages

No Medical Exam

This is by far the biggest selling point of Globe Life insurance policies. You are not required to undergo any medical examination. All you have to do is fill out an application, which has a few questions on your health condition.

If you are middle-aged or older and if you are suffering from health problems, you might find it difficult to buy sufficient coverage for yourself and your family at affordable rates. You are likely to get turned down by companies that do not deal with people from high-risk categories.

Even in cases where you get accepted, your overall insurance costs could go up significantly owing to your age and health condition. This is precisely why many people from high-risk categories open the door for ‘no exam’ policies, similar to the ones offered by Globe Life.

Simple and Convenient Application Process

The application process is quite simple, as you all you have to do is answer a questionnaire. There is no waiting period as you buy the policy directly from the company. Insurance policies are available for children and adults of all ages. You can choose to pay the premiums on a monthly, quarterly, or yearly basis, depending on your convenience.

Wide Range of Accidental Benefits

Globe Life offers one of the most comprehensive accidental insurance plans on the market today, which includes a number of additional benefits. While it cannot replace a term policy, it can be an excellent addition to a term or whole life policy and take care of your family’s needs in case of your passing.

Money Back Guarantee

All Globe Life insurance policies come with a no-risk 30-day money back guarantee. If you are not satisfied with the policy for any reason, you can cancel it within 30 days and get your money back.

Disadvantages

Increasing Premiums

Globe Life term policies have an incremental premium structure, wherein the premium is revised every five years or when you move to a new age bracket.

For example, if you buy a policy at the age of 51, your premium will be revised after five years – when you turn 56. At the same time, if you buy a policy at the age of 54, your premium will be revised after just two years, when you turn 56 because you move to a different age bracket.

It means your premiums keep increasing throughout the duration of the policy, while your death benefit remains the same.

Low Death Benefits

The death benefit for Globe Life’s term life and whole life insurance is capped at $100,000 and $50,000 respectively. In most cases, it is not sufficient to take care of your family’s financial needs after your passing.

Is Globe Life the Right Choice For You?

Like any other company, Globe Life has its own strengths and weaknesses and is not the ideal choice for everyone. The most essential aspect you need to remember, however, is that Globe Life is a simplified issue life insurance provider.

They primarily cater to a specific niche – middle-aged and older people with several health issues, for whom regular insurance policies are not an option due to their age and health condition.

If you are young and healthy, there is no reason why you should open the window for a ‘no medical exam’ policy. You could select an insurance company which requires you to undergo a medical exam and has strict underwriting policies but offers sufficient coverage for you and your family at suitable rates.

The bottom line is that Globe Life is a judicious option for people who belong to the high-risk category.

If you are old, do not have substantial financial commitments, and are just looking for a policy to cover your funeral expenses and to pay off minor debts, Globe Life term life and whole life insurance might be a salient choice for you. If you are young, healthy, and belong to the low-risk category, you have several other options to choose from.

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Term Life Insurance

A life insurance policy that offers coverage for a fixed duration is known as: term life insurance.

The insured is required to pay a pre-determined amount as premium at periodic intervals during the policy’s term. At the end of the policy term, the insured can open the door to a new insurance policy at the new rates and conditions prevailing at that time.

If the policyholder passes away before the maturity date, the insurance company will pay death benefits, as promised in the term life policy to his or her nominee.

Term life insurance has two primary benefits:

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AIG Life Insurance Review

Term
Life Insurance

Up to : $1,000,000

Age Groups: 18 - 65
Health: Medium to Great

Works for:
Family Income Protection

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Are you someone who is looking to buy life insurance? Are you wondering if AIG life insurance would be a good choice for you? Do you want to know if AIG’s products match your needs?

You can find the answers to these questions and a lot more information on AIG in this review.

In this article, we take a detailed look at AIG, its background, its current position in the market, its products, and the pros and cons of choosing the company as your insurance provider.

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Mortgage Life Insurance

Term
Life Insurance

Up to : $1,000,000

Age Groups: 18 - 65
Health: Medium to Great

Works for:
Family Income Protection

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mortgage life insuranceA mortgage is an ongoing debt, which usually takes several years to pay off and requires a long-term commitment on your part. Most people get a mortgage in their late 20s or early 30s and only manage to pay it off when they are on the brink of retirement.

Now, the question to be asked is – what happens to your mortgage and your home if something were to happen to you? Unless you are independently wealthy or have someone in the family who is unusually wealthy, your family might find it hard to pay off the mortgage after you are gone or if you are unable to work and earn like you have been doing.

This is where mortgage protection insurance can help you. Read on to learn about how to find the best mortgage life insurance policy for you.

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Finding the Best Life Insurance Policy

Term
Life Insurance

Up to : $1,000,000

Age Groups: 18 - 65
Health: Medium to Great

Works for:
Family Income Protection

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life insurance quotes

Life insurance is one of the best ways to make sure your family is taken care of after you are gone. The purpose of life insurance is to cover expenses or replace lost income after the passing of a relative.

From basic necessities such as funeral expenses to outstanding debts, estate taxes, regular bills, and children’s education, life insurance plans can cover a whole range of your family’s needs even after your death.

The unfortunate reality, however, is that a large number of people do not buy insurance on their own. Rather, they are talked into buying it by someone in their social circle or an insurance agent.

So, they do not pay attention to the details and buy the policy recommended by the salesperson without even knowing if it is the right choice for them. This is a flawed approach, as you have no way of knowing if the policy you buy will sufficiently cover the needs of your family after your death.

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