A whole life insurance policy is a type of life policy where the insured is given coverage for life. Furthermore, it builds cash value. A whole life insurance policy can be used for …
1) Taking care of death and burial expenses. However, be careful about buying policies that are sold specifically for these as the may not be worth the premiums you'll pay.
2) Estate or probate taxes.
3) Building up cash value while enjoying life coverage. The policy can be surrendered for its cash value whenever the policy holder deems fit.
4) Giving to your favorite charity. Your favorite charity could have made your beneficiary.
5) Giving special gifts. You can draw funds from it to help your kids make a down payment on their first home.
6) You can also draw funds from its cash values for personal projects.
Your whole life insurance policy should have a table that shows you how much cash it accumulates. The longer you maintain the policy, the larger the cash values that accrue. If you ever choose to cancel your whole life policy, you can get the cash value as a lump sum.
You're not likely to be taxed if you surrender or cash in your life insurance policy. You pay taxes only if the sum of your cash value and any policy policies exceed the sum of premiums you've paid over time. As always, ask your tax profession to be sure in your circumstance.
You may not get anything if you surrender your entire life insurance policy in its first and second years due to surrender charges. Check through policy terms to see what you'll get and from when.
If you've not yet bought a life insurance policy, the younger you are when you buy it, the better for you.
You can lower your entire life insurance costs dramatically by getting and comparing quotes from at least three quotes sites that return affordable whole life insurance quotes.