The Whole Truth About Straight Life Insurance?

Through the medium of life insurance, millions of individuals have accumulated savings while protecting their families. In this article, we seek to explain why Straight Life Insurance functions as a vehicle for personal savings. 

What is Straight Life Insurance?

Straight life insurance is a type of permanent life insurance. The goal of a permanent policy is to have life insurance in place for the rest of your life. 

It is also known as ordinary life insurance or whole life insurance.

Such type of insurance helps your family prepare for the sudden. The guaranteed death benefit can help replace a family's loss of earnings, help with mortgage costs, or educational needs — or leave a legacy for the next generation

How does straight life insurance work?

The whole life provides lifelong coverage and includes an investment component known as the policy’s cash value. The cash value grows slowly, tax-deferred, meaning you won’t pay taxes on its gains while they’re accumulating.

In most cases, the premium and death benefit stay constant for the duration of a whole life insurance policy. A straight life insurance policy might be a fit for someone who likes predictability over time. Because whole life insurance gives you fixed premiums and a fixed death benefit, you won't have to worry about increased premiums as you get older. 

The cost of a whole life insurance policy depends on several factors, including how much coverage you buy and other things.

When it comes to paying your premiums, you'll typically be able to make a fixed annual payment for a whole life insurance policy.

What type of premium does a straight life policy have?

All whole life policies have three parts: premiums, cash value, and a death benefit. The premium is the amount of money you pay for the policy. Depending on the policy, you pay the premium in a large one-time lump sum, once a year or monthly.

It's important to understand that the whole life insurance provides coverage that can last your entire life and doesn't require renewal as long as you make regular payments. So, the premiums you pay for the policy can give you access to cash value while you're living. What is more, premiums never increase.

So, let's get acquainted with types of straight life insurance and see how the premiums differ. 

Traditional Straight Life Insurance

A traditional whole life insurance policy gives you a guaranteed minimum rate of return on your cash value portion. 

Interest Sensitive Straight Life Insurance

With interest-sensitive straight life insurance, you can have more flexibility with your life insurance policy such as increasing your death benefit without raising your premiums depending on the economy and the price of return on your cash value portion. Sounds interesting, isn't it?

Single-premium Straight Life Insurance

Single-premium is good for someone who has a large sum of money and would like to purchase a policy up front. Like other whole life insurance options, single-premium whole life insurance accrues cash value and has the same tax shelter on returns.

Hope, we provided some clarity on what whole life insurance is and how to choose the best one for the loved ones!