Category Archives: Personal Finance

What to Do When Your Term Life Insurance Policy Runs Out

“All good things must come to an end.”

Fortunately, this doesn’t apply to modern day term life insurance policies!

While some analysts suggest that you won’t need insurance after a 20-year term. They may try to convince you that your children will be grown and you will have accumulated enough savings in cash and investment to support your spouse if you die prematurely.

Yes, in theory, it sounds like quite the plan. But it is important to understand that only a few people will have such a defined, and hassle-free life path.

What is term life insurance?

If you already have term life insurance, skip this brief section.

Term life insurance is life insurance that lasts for – you guessed it – a term.

This term can be 10 to 30 years, and they are usually offered in 5 year increments.

Term life insurance offers affordable life insurance coverage for people who need it.

But there is one problem with term life insurance: it expires!

What Happens When My Term Life Insurance Policy Runs Out?

Alright, let’s answer the big question.

When people buy term life insurance, they rarely give much thought to what would happen when their term runs out.

What Does Expiration in Term Life Insurance Mean?

Expiration in Term Life Insurance is a little different from the conventional meaning of “expiration”.

When your policy reaches the end of its term, your policy won’t just end.

This is where it gets interesting.

If you look into the details of your policy, there is a table that shows the cost on a year to year basis. This table that shows the yearly cost is usually called a rate or premium illustration.

For example, if you purchased a 20-year policy, you will notice a relatively higher price increase on the 21st year after your 20-year term has expired. The cost after the 20th year will continue to increase significantly, year after year.


Term life insurance does not “expire” once your term is through.  Instead, premiums go up drastically on a yearly basis until you either cancel the policy or open a new policy.

Now, you can put a stop to this if you no longer want the policy beyond the low-cost guarantee period.

What Should I do to Convert or Cancel My Policy?

You can contact the insurance company that you want to cancel the policy at the end of the term. If you wait to see it out, you will continue to get debited without warning.

Some people switch to paper check payments after the expiration of their policy to avoid the risk of getting their checking accounts debited.

One thing to note is that your policy is not actually expiring. Most policies will cover you until you the age of 95.

Your rate will only continue to increase rapidly at the end of each term (year, quarterly, or biannually or monthly), often to a point where the coverage is no longer worth the premium you will dole out.

The Relationship Between Term Life Insurance, Increasing Premiums, ART

First and foremost, let’s get this out of the way -Every year you live makes you a little more of an insurance risk to insurance providers.

When you buy an annual renewable term policy, your premiums will rise annually.

This kind of policy is known as an Annual renewable term (ART).

ART premiums might look like this for the first few years:

  • The 1st year might be $340
  • $465 in the 2nd year
  • $475 in the 3rd year

Ten years down the line, your premium may climb to $650 per month for coverage! This simple example illustrates why people tend to shy away from Annual Renewable Term.

Because of the low demand for ART, Many Insurance providers offer level term Insurance policy. They can cover you until age 95 but at a fixed premium rate for 10, 15, 20, or 30 years

Calculating Level Term Premium – It’s a Simple Average

To determine your level premium, life insurance providers add up the payments for each year in the 20-year term and divide it by 20.

In most cases, 20-year level term life insurance is the average premium for the first 20 years of coverage.

From the 21st year and above, it reverts to an annual renewable policy (ART).

What to Do When Your Term Life Insurance Policy Expires?

1. Shop for a New Term Life Insurance Policy

If your state of health is rock solid or relatively good enough, it is time to shop for a new level term insurance. Yes, you will have to pass a medical exam in most cases and pay the standard amount for an individual within your age range. You may not need as large a policy as the first one you purchased when you were much younger. This means the price will not be overwhelming.

Hold on to your wallet and look for another insurer who may be offering something cheaper. If you’re shopping around for rates for a new policy, be sure to consider one with Low Renewal Premiums!

A good source for doing your comparison analysis shop is our online term life insurance quote tool.  You can find this at the bottom of this post on mobile, or on the right for desktop.

2. Converting Term Policy to Permanent Insurance

If you have a poor health condition, much older (usually and do not want to undergo any form of medical examination, you can convert your existing term policy to permanent insurance.

Your insurance company will offer you different conversion policies to choose from. Converting to permanent insurance plus your health state means you will pay much more than when you were paying for term life insurance (Depending on your insurer, it is usually about 2-3 times the cost of your current premium).

The good part is you can control the cost by purchasing a smaller policy. This is a good fit, since you are older and don’t need many years of coverages as you once did.

Time is of the essence. You must convert within the period the term policy allows you to. Some insurance providers keep the conversion window open for only 10 years if you had purchased a 20-year policy.

It is also important not to convert too early. Always stay updated on the details of your policy and check with your agent to be sure you are getting the best coverage at the time.

3. Renewing or Extending Your Expired Term Life Insurance

If you are in a poor state of health and happened to miss the deadline for converting to permanent insurance, there is still an option for you – a rather costlier option.

You can renew your about-to-expire coverage without undergoing a medical examination. You will only have to pay much higher premiums and they will keep increasing geometrically, year after year.

This option is decent enough if you only need a few years, over 70, or have medical conditions that make it hard to get a new policy.

You probably won’t be able to sustain the cost of the policy for very long.

Think about future coverage well enough before the expiration of your term. If you think you won’t be able to pass a medical examination, you can convert your term policy to cash-value coverage while you still can.

Can I still get coverage with a health issue? 

Yes, no medical exam life insurance is recommended for people who are older, or who have a medical condition.

4. Decrease Your Death Benefit

Many insurance providers will allow a one-time decrease in face value to your life term policy. The result is a noticeable reduction in your premiums.

5. Sell Your Policy

If your policy is still convertible, you may be able to convert the policy and then sell it.  It’s called a life settlement. It is important to identify when selling your life term policy is a viable option and when you might be getting shortchanged.

Before you jump into a life insurance settlement deal, you will have to come to terms with the fact that a third party will own insurance on your life and profit from it when you die (no benefits for your family after death).

Also, some individuals are better candidates for a life insurance settlement than others. For example; Having a term life insurance policy or a universal life policy with a face value over of over $200,000 makes your policy more attractive to investors. You are more likely going to receive a worthy offer.

Can You Sell Your Term Life Policy?

Yes, you can sell your Term Life Policy.

A life insurance settlement involves the assured and another entity (usually an investor). The buyer or investor becomes the owner of the policy, settles the premium payments and will receive the death benefits in the event of death.

A life insurance settlement (also known as a viatical settlement) allows you to receive more money than you would have received from the insurer if you canceled or forfeited the policy but less than the coverage value/death benefit of the policy.

Selling a life insurance policy is a good way to get immediate cash for retirement, health bills or unforeseen heavy expenses. However, it is not always the easiest or best option to raise quick cash at your point of need.

Finding a buyer for your life settlement involves a bit of documentation.

You can do this on your own or use a life settlement broker to look for prospective offers to purchase your life term policy.

You will be asked to provide medical records and your term life policy documents to the potential investor. The settlement provider(s) will make you an offer after reviewing your files based on a range of factors such as:

  • Your age and health
  • The type of policy you have
  • The cash surrender value (accumulated cash value) of the policy
  • Amount of premiums

If you are much older or in a poor health state, you will receive a better cash offer as the face value of your policy is worth more to investors or settlement companies as they are going to sense an avenue to make some profit.

What Happens When My Term Life Insurance Runs Out – Takeaways

Even though your term period has “expired”, your policy may still have value to you. If you find that you still need life insurance protection at this point, you do have options for extending your term life insurance policy, converting or renewing, selling the coverage.

It is important to stay informed as making the wrong decision can cost you a fortune. Give us a call today, and we can review your policy and go over your options with you.

Or, use our term life insurance quote tool to compare some of the best term life insurance rates for a new policy!

compare the best life insurance rates

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Affordable Life Insurance is Possible

Is affordable life insurance possible?  According to the 2017 Insurance Barometer, an annual report published by LIMRA (Life Insurance and market research association), there are only three reasons consistently reported by more than two-thirds of respondents each year regarding why people don’t buy life insurance:

  1. It’s too expensive.
  2. I have other financial priorities.
  3. I have as much as I need.

Regarding #1, there are several studies (including the LIMRA annual report), that shows that most people actually overestimate the cost of life insurance.  #3 is debatable in most cases and while many people do have other financial priorities, if you have a family, life insurance should be one of those priorities.  In this article, I’m going to suggest that, perhaps, with a little shuffling of your budget, you will be able to afford a policy.

Reduce your spending on clothing

purchase affordable life insurance policy by saving money on clothing

According to an analysis conducted by the Bureau of Labor Statistics, Americans spend an average of $1,700 a year on clothing and accessories. If you want to bring that number down, but still dress stylishly, we offer the following suggestions:

  • Buy generic basics – You don’t need t-shirts and sweatpants from a luxury designer. Most big-box stores carry these items at an affordable price.
  • Know what you need to buy – We almost always go to the supermarket with a concrete idea of what we need to purchase. You should do the same thing at a clothing store – make a list and try to stick to it.
  • Purchase out-of-season items – Buying a coat in July or a swimsuit in December will usually be cheaper because retailers are eager to move these types of products off the shelves.
  • Use coupons – There are multiple websites dedicated to finding clothing store coupons. Be sure you know where the best discounts are before heading into any store.
  • Visit non-traditional retail outlets – You’re most likely not going to get the best deal at a department store in a mall, but there are plenty of other places you can go to find high-quality clothing. Discount retailers like Marshalls and T.J. Maxx sell name-brand items for a fraction of the suggested price. Additionally
  • Investigate the discount rack – While you won’t find a designer dress in the low-price aisle, you might come across something great for a bargain. Some people attach a stigma to the discount rack, but the reality is that most of the clothes there are only a few seasons old and are still in great condition.
  • Keep an eye out for future sales or special deals – Every so often, a product that you may need will get a temporary price cut that you would be smart to take advantage of. Look for advertisements around the store or in the newspaper to see when these special events happen, especially around the holidays.
  • Purchase clothes online when you can – Some online retailers offer exclusive deals if you’re willing to pay for shipping costs. Though it’s not true 100 percent of the time, buying your shirts, pants and accessories on the internet might help you squeeze a few more dollars out of your clothing budget. If you use sites like eBay, which sometimes allows you to buy far less expensively, remember to check the user testimonials before sending someone your contact information.

Reduce your car expenses

save on car expenses in order to buy affordable life insurance

Owning a car enables a person to drive to one’s job, travel on vacation or simply get around while doing errands. Unfortunately, a car can be rather costly, especially when repairs have to be made and gas prices creep up in the summertime.

When it comes to controlling your expenses, however, there are ways to lower the amount of cash you have to dump into your vehicle on a monthly basis.

Today, we’ll look at a few of these strategies and suggest ways of protecting your wallet from car-related costs.

To reduce spending that is associated with your car, you should:

Cut down on short trips – If you’re thinking of heading to the pharmacy or the library, you should see if it’s cheaper to ride public transit or simply walk. By reducing the number of times you drive around within your town, you can save on the fuel you have and keep you from visiting the gas station every other day. Also, the health benefits of walking cannot be overstated.

Maintain inflated tires – One of the easiest ways to improve your gas mileage and, by association, your bank account, is to keep your tires properly inflated with air. Improperly inflated tires create extra drag which may unnecessarily slow down your vehicle and reduce the mileage you get.

Survey the area for cheap gas – Most people opt for the convenience of choosing the nearest station. While this is definitely easier, it’s not a bad idea to keep an eye out for consistently cheap gas. By doing so, you can get more for less if you plan your fill-up visits. You can now get an app for your smart phone that will actually show you where the least expensive gas is in your area.

Avoiding driving during rush hour – Creeping along the highway and sitting in stop-and-go traffic does nothing but drain your gas tank. Many offices offer flexible work environments that give you some leeway as to when you can arrive in the morning. Leaving your house 30 minutes earlier or later can be the difference between a smooth ride to work and gridlock.

Driving the speed limit – When you think about it, driving a few miles per hour over the speed limit really isn’t going to get you to your destination that much earlier. According to Edmunds, driving 60 miles per hour results in 12 percent cost savings over driving 75 mph. In addition to saving gas, you’ll also avoid expensive speeding tickets.

Not moving erratically – Aggressive driving that involves speeding followed by quickly slamming on the brakes puts unnecessary wear and tear on your car and spoils your fuel economy. This type of driving may also increase your likelihood of being involved in an accident.

Saving money on common household expenses

A recent LIMRA study found that over half of Americans cite common expenses “such as energy costs, food, clothing and transportation […] as limits on [their] ability to save for financial goals.”

An affordable life insurance policy should be included in almost everyone’s financial plans, so we offer the following suggestions to help you cut down on common household expenditures:

Bundle services

If you have a landline phone, internet and cable from different providers, you should consider bundling them into one service from one company. Consolidating all of your accounts will not only save you money, it is also more convenient, as you will not have to deal with multiple bills.

Cut back on extras

While you’re thinking about phone, internet and cable, you may want to examine your bills and eliminate unnecessary costs. Do you really need caller ID and call waiting? Could you get rid of premium cable channels? Could you get rid of cable altogether? These expenses quickly add up, and after getting rid of them, you may find that they really weren’t necessary.

Scrutinize other insurance costs

The monthly premiums of auto and homeowner’s/renter’s insurance can take a huge bite out of your wallet. Simply shopping around for a better rate could save you hundreds of dollars over the course of a year. If you can’t find a cheaper policy, ask about discounts that may be offered for families and good students. If you have a car that you don’t drive, consider cancelling the insurance policy for it.

Avoid these money-wasting vices

Most people want to save money, but when thinking about how they’ll cut costs, many only focus on large expenses such as housing and transportation. It is important to remember, however, that items that you spend a few dollars on once or twice a week may make a huge dent in your wallet over the course of a year.

The following money-wasting vices should be avoided in order to keep your budget looking healthy:

Fast food

Not only is it bad for your wallet, it’s bad for your health. Instead of heading to the drive-thru, prepare your meals at home.

Gourmet coffee

A cup of coffee from Starbucks or a similar shop can easily cost $4 or more. If you bought a cup every weekday at this price, you would spend over $1,000 in one year. Making your coffee at home is a simple way to keep consuming your favorite beverage without paying the coffee shop premium. The price of home-brewed coffee is usually around $1 a cup, and depending on the brand that you use, it could be even lower. As an added benefit, you can brew your coffee to fit your taste.


The use of cigarettes, cigars, snuff and other forms of tobacco may be the most expensive and unnecessary habit that a person could have. According to Business Insider, a pack-a-day habit could cost a smoker over $100,000 over his or her lifetime. Tobacco use also increases the risk of heart attack, stroke and oral cancer, which could result in significant medical expenses.

Eliminating these bad habits will not only improve your health, but also free up your budget for a new life insurance policy or increased coverage.

Effectively using coupons

One of the easiest ways to save money on items you buy every day is to use coupons for your purchases. No, you don’t have to engage in any “extreme couponing” to cut back on your expenses, and we offer the following tips and suggestions to help you incorporate coupons into your shopping experiences.

Know where to find coupons

Yes, they’re most commonly found in the weekend edition of your local newspaper, but there are many other places to search for them. Don’t forget to check out online resources, as many manufacturers have coupons on their websites. In addition, keep your receipts from previous purchases, because many of them have coupons attached.

Only purchase products that you use

This is one of the most important rules of using coupons. Buying a bunch of items that you don’t actually want or need will just cost you more money. A significant discount on a dozen cups of yogurt may seem like a good deal, but is it really if no one in your house wants to eat them? You should only cut and use coupons for items that you and your family regularly consume.

Start at one store 

You may be tempted to use coupons at as many stores as possible, but it’s best to start at one. Many retail establishments have unique rules about how they accept and deal with coupons, and it may take you a while to figure it out. Once you are more comfortable using coupons during your shopping trips, then you may want to consider branching out to other locations.

Using coupons will not only keep your wallet in check, it may also open your budget to purchase life insurance or increase your existing coverage.

save on heating bill so in order to purchase affordable life insurance

It seems like every year when temperatures begin to cool, we hear the same discouraging news: Home heating costs are rising. This may not seem important for individuals who live in warm climates year round, but for folks in places that have long winters, this means more money out of their wallets. While you can’t completely eliminate turning on your heater this winter, taking a few simple measures can help you reduce your monthly bill. We detail a few common ideas below:

Adjust the thermostat

Want pay less for heat? Then use less of it. While we’re not suggesting that you sit in your house shivering, counting down the days until spring, making slight adjustments to your thermostat can help save you some cash. During the day and other times when you are not home, set the thermostat to 68 degrees.

If you don’t want the responsibility of adjusting the temperature every day, consider purchasing a smart thermostat. They cost about $50 and can be programmed to turn the temperature down during times when heat is not necessary. According to the Environmental Protection Agency (EPA), by using a smart thermostat, you’ll save around $180 on your annual energy bills.

Don’t let heat escape

Whenever the heat is on, all windows and doors should be closed, including your fireplace’s damper. Due to the fact that warm air rises, an open damper is similar to having a hole in the roof of your house. While heat escapes, cold air will flood in.

Small cracks and hard-to-see spaces are other avenues through which heat can leave your home. To find them, light a candle and hold the flame near windows, door frames and light fixtures. If you see smoke moving in a horizontal direction, this means that you’ve spotted a leak. To fix them, install caulking or weather-stripping material.

Make your home more energy-efficient 

While we generally like to offer suggestions that have minimal up-front costs, it’s possible that basic, inexpensive measures won’t make a significant difference in what you pay for heating. If this is the case, you may want to think about making significant adjustments to your house, including:

  • Adding more or replacing old insulation
  • Purchasing a new furnace or water heater
  • Replacing your windows.

With these heating-related cost-cutters, you could save enough to budget for a new life insurance policy or an increase in your current coverage, an essential piece for financial protection for your loved ones.

Hopefully, some of these suggestions can help you keep more money in your wallet and allow you to budget for that affordable life insurance policy you have been putting off. For a life insurance quote, use our online quote generator to find out which policies you may qualify for.

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Term vs Whole Life Insurance

Deciding which type of life insurance product is right for you can be difficult; regardless of whether you’re considering retaining your current policy or you’re shopping for new coverage, it’s important to note that there are benefits to both term life insurance and whole life insurance.

Which is the best fit for your needs, preferences, lifestyle, and family?

Here, we discuss Term Life Insurance vs. Whole Life Insurance. In this article, we will be covering:

Term Life Insurance

  • What is term life insurance?
  • Term life insurance FAQ
  • Who is term life insurance best for?
  • Term life insurance policy riders
  • Term life insurance pros and cons
  • Term life insurance rates

Whole Life Insurance

  • What is whole life insurance?
  • Who is whole life insurance best for?
  • Whole life insurance policy riders
  • Whole life insurance pros and cons
  • Whole life insurance rates

There are some key differences and similarities between these two types of coverage. As for similarities, they both offer a guaranteed death benefit, and they both offer generally federal tax-free benefits. But let’s consider some of the differences between whole life insurance and term life insurance.

How Does Term Life Insurance Work?

Term life insurance is something that you buy into for a specific amount of time. When you apply for term life insurance, you pick the amount of money you want to be paid out to your beneficiaries if you pass away during the length of that term. Then you set up the duration you want the term to last. 

The amount of money that is paid out to your beneficiaries is called the face amount. The length of time that the policy’s death benefit remains in effect is called the term length. Most life insurance companies offer term life coverage in 5-year increments between 10 years and 30 years although there are some companies such as AIG that will let you pick a specific length of time such as 17 years.

Premiums are usually paid on a monthly basis, but there are also options to pay annually, which can save you some money over the course of your policy. Once the term is over, your policy “expires”. I put this in quotations for a reason, check the warning below.

WARNING: Term life insurance does not expire in the traditional sense of the word at the end of your term. Instead, it is converted into what is called an Annual Renewable Term (ART) policy. This policy is renewed automatically every year unless the policy owner cancels it. The rates for ART’s quickly become very high and unaffordable within the first few years.

I take the time to warn you about this because I have heard dozens of horror stories of people not knowing about this process which is clearly defined in the terms of their policy, and by the time they find out, it is too late to change, and they have lost a lot of money on a policy with very little practicality.

When your term life insurance policy has “expired”, many companies will let you convert the policy you have into a whole life insurance policy without having to do the application process all over again or take another medical exam. This option is often offered through what is called a Guaranteed Insurability Rider. 

When is the Best Time to Convert From Term to Whole Life Insurance?

The best time to convert from term to whole life insurance is when your term life insurance policy is about to expire, and you are currently in your 50s or 60s. At this point, you will not be able to take out a longer term policy and given the average lifespan, this is the best time to convert to something permanent.

If you want to extend your current life insurance coverage but the annually-renewable term options are no longer available for you or are simply too expensive because of your current age, it is in your best interest to convert to a whole life insurance policy.

Another reason you want to convert to a whole life insurance policy is that you are setting up an estate and are currently concerned about estate taxes. You might be setting up a trust in your will. You might also need a nontaxable investment option. In all of these cases, a whole life insurance conversion may be the best option for you.

Who is Term Life Insurance Best For?

Term life insurance is best for people who have finite financial needs that they want to cover. People that fit some of the following criteria might be better off with term life coverage:

  • Somebody who has a mortgage and other large outstanding debts
  • Somebody who wants to cover expenses for childcare
  • Someone who wants to help replace income with life insurance in the event of their death
  • People who have financial dependents (spouse, children, etc…)
  • Somebody who wants to leave behind money to help pay for funeral expenses 

Those who have obligations such as alimony or child support can set up term policies to coincide with the length of those responsibilities.

Other people who might not qualify for whole life insurance could benefit from a Term Policy because it will be the only option they have or perhaps the more affordable option.

On that note, people who simply cannot afford a permanent policy at this time can easily take out a much more affordable term life insurance policy and convert it at a time when their financial situation is different.

Term Life Insurance Policy Riders

Below is a list of some of the common term life insurance policy riders that we recommend people purchase, based on their individual needs. While there are certainly more riders available depending on the company and policy you choose, these are generally offered by most life insurance companies, and provide the most value to the policyholder.

Each of these policy riders has their own costs associated with them that are added to the monthly premium you will pay for your term life policy.  Some are expensive, while others are cheaper, and some are even offered as complimentary with certain term life policies from certain companies.

1. Guaranteed Insurability Rider 

As described above, this rider allows you to convert a term life insurance policy into a whole life insurance policy without having to retake a medical examination, which could put you in a lower health class, and cost you more in monthly premiums.

2. Return of Premium Rider

This return of premium policy rider allows policyholders who outlive the term of their life insurance policies to receive all of the premiums they have paid into their policy back at the end of the term.

This is one of the more expensive term life insurance policy riders.  In some cases, companies offer it as an individual type of term life policy instead.

3. Accidental Death Rider

The Accidental Death Rider allows your beneficiaries to receive a multiple of your death benefit if you die as a result of an accident (as defined by your policy). This rider is also available on whole life insurance policies.

4. Waiver of Premium Rider 

The waiver of premium rider makes it so that you do not have to pay your life insurance premium in the event that you are unable to return to work full time as a result of injury or sickness. This rider is also offered on whole life insurance policies.

5. Disability Income Rider

This rider pays out a supplemental income that is proportional to your policy face amount in the event that you are permanently disabled and unable to return to work. This rider is also offered on whole life insurance policies.

6. Children’s Term Rider

This rider allows you to add life insurance for a child from age 15 days to 18-25 years (depending on the company).

Term Life Insurance Rates 

The following table shows term life insurance rates for people in the preferred plus health category, with no health issues.

Note that as you get older, certain term options are no longer available. This shows the need for some people who are looking for life insurance coverage that lasts their whole life to look towards permanent life insurance options as they get older.

Pros and Cons of Term Life Insurance


  • Term life insurance rates are far cheaper than whole life insurance policies
  • Term policies can be chosen very strategically to last a specific period of time, such as how long you have left on a mortgage payment, or how long until your children are no longer financial dependents
  • Term policies can be purchased together in order to have tapered coverage for later in life as your need for life insurance decreases, in a process called layering term life insurance
  • Policies can be converted into whole life with the same health classification as when you first purchased them (with Guaranteed Insurability Rider)


  • As the name suggests, term life insurance policies are temporary which means that if you outlive it you will have to purchase a new policy. At this point, you will be older and possibly less healthy which means that you will end up paying higher premiums.
  • Unless you specifically purchase a policy with a Return of Premium Rider you will lose all the money that you invest in your policy

How Does Whole Life Insurance Work?

Whole life insurance is a form of permanent life insurance.  This type of life insurance coverage lasts for your entire life. 

Part of the money you pay in your premiums get invested and depending on how well those Investments perform, you accumulate cash value in the policy.

This cash value can be borrowed against on a tax-free basis throughout the life of your policy, which can be a strong financial tool.

There are many types of permanent life insurance, including, but not limited to some of the following:

  • Variable Universal Life Insurance
  • Indexed Universal Life Insurance
  • Universal Life Insurance
  • Guaranteed Issue Life Insurance

What separates the various types of permanent life insurance policies apart is how the cash value is accumulated.

Whole life insurance policies have a guaranteed rate of return, which varies based on company and policy.  This makes whole life insurance one of the easiest and safest investment tools for people interested in purchasing permanent life insurance because even in bad years for the market, they will still gain the same amount of return (or more if the company pays dividends to its policyholders).

For people with more advanced financial knowledge, who want to have more influence in the way that their policy accumulates cash value, we recommend a different type of permanent policy such as variable or universal life.

Who is Whole Life Insurance Best For?

Whole life insurance coverage is best for people who:

  • Need permanent coverage
  • Want to use their insurance policy as a financial and investment tool
  • Want to cover estate taxes or inheritance issues

For example, a whole life insurance policy may work best for someone who has three children and one of them will inherit the family business while the other will receive a house, the third could receive a life insurance policy, so that everyone inherits something in the event of your death.

Whole Life Insurance Policy Riders

Below is a list of some of the common whole life insurance policy riders that we recommend people purchase based on their individual needs. While there are certainly more riders available depending on the company and policy you choose, these are generally offered by most life insurance companies, and provide the most value to the policyholder.

Each of these policy riders has their own associated costs that are added to the monthly premium you will pay for your term life policy.  Some are expensive, while others are cheaper, and some are even offered as complimentary with certain whole life policies from certain companies.

Additional whole life insurance riders include accidental death and waiver of premium, which were listed above with the term life policy insurance riders.

1. Term Insurance Rider

This policy rider is exclusive to permanent life insurance policies. It allows you to purchase additional term life insurance coverage in order to supplement your existing whole life coverage. This can be an affordable way to add additional life insurance to your policy for a set amount of time without having to apply for a new policy, or drastically increase rates on your existing one.

2. Children’s Term Rider

This rider allows you to add life insurance for a child from age 15 days to 18-25 years (depending on the company).

3. Long-Term Care Rider

This policy rider is strictly offered for permanent life insurance policies including whole life. It allows you to use a portion of your death benefit toward long-term care if the need arises in the future.

This rider is highly recommended for whole life insurance because people are living longer than ever, and the cost of assisted living is very high (upwards of $5,000-8,000 per month), which can leave a large financial burden upon a family.

Whole Life Insurance Rates 

The following table shows whole insurance rates for people in the preferred health category, with no health issues.

Pros and Cons of Whole Life Insurance


  • You can enjoy lifetime coverage, as long as you continue to pay your premiums, without ever having to get another policy
  • Whole life policies accumulate cash value which can be borrowed against tax-free
  • Cash value accumulates at a set rate, taking the need for you to worry about it out of the equation
  • Whole life insurance is a great option for someone looking to set up an estate or trust


  • Whole life insurance rates are inherently much higher than term life premiums because of the guaranteed payout
  • Whole life insurance does not offer as much cash value accumulation potential as variable, universal, or indexed life insurance policies
  • The excess in premiums paid into whole life policies over term that accumulate cash value could arguably be invested in the market to potentially yield higher returns over time

Choosing the Best Type Life Insurance Policy for You

When it comes to choosing the best type of life insurance coverage for you and your family, what you choose ultimately depends on a multitude of factors such as health, age, budget, coverage needed, and more.

We know that the options may seem overwhelming, that is why we are here to help!

Give one of our independent life insurance agents a call today to speak with them for free about which policy may be best for you and your family’s needs. Our agents can explain to you all of your coverage options from companies, to policies, to rates, to help you find the best coverage for you and your loved ones.

Call us today, or get started using our online life insurance quote tool to compare life insurance rates instantly!

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