Whole life insurance is a well-known type of life insurance – they’re dependable and offer additional benefits on some plans such as policy cash value, which adds to their popularity. But that doesn’t mean that consumers don’t have questions about different facets of their whole life policies.
People often wonder if their age will affect their premiums. In this article, we’ll address this concern by answering one major question prospective policyholders have when choosing a policy: Do whole life insurance premiums increase over time?
What’s the difference between whole life and term policies?
The major difference between whole life and term policies is that whole life insurance policies have the potential to help protect you for your lifespan rather than for a specified term, as is the case with term life insurance – assuming premiums are paid and other terms of the policy are met. Rather than protecting you up to a certain amount of years, say for example, 20 years, a whole life insurance policy wouldn’t simply expire because you reach a certain age or surpass a time limit.1
Do whole life premiums increase over time?
Whole life policies are structured to pay death benefits to beneficiaries in exchange for regular premium payments, assuming premiums are paid and other terms and conditions are met. Unlike some other life insurance policy types, whole life premiums do not vary as you age. If you take a loan against the cash value of your policy, you’ll be subject to interest and other loan terms, just like any other loan. If the loan isn’t paid back at the time of passing, the death benefit will be reduced by the remaining balance of the loan.2
Do whole life insurance premiums increase over time? No, they don’t – and that’s the beauty of these types of policies. Whole life policies are built to have consistent premiums for as long as you have the policy.3 Investigate what other benefits you can expect with your particular policy as you shop around for protection for your family. Speak with your insurance company or a licensed life insurance agent to help figure out which type of life insurance is best for your needs.4
Investopedia, How Age Affects Life Insurance Rates, 2019
Investopedia, Whole Life Insurance, 2018
NerdWallet, 5 Myths About Whole Life Insurance, 2015
The Balance, Is Whole Life Insurance Policy the Best Option for You?, 2020
Categories: insurance, life insurance, whole life insurance