A. Below is a list of the advantages of whole life insurance products -
- A guaranteed ceiling on mortality and expense charges and a guaranteed floor on interest credited to cash value
- Safety due to close regulatory supervision of company solvency
- There is an opportunity for investment management because life insurance companies provide skilled personnel and broadly diversified investment portfolios
- Cash value interest or earnings accumulate tax-free or tax-deferred, depending on whether gains are distributed at death or during lifetime
- Cash values are not subject to the market risk associated with longer-term municipal bonds and other longer-term fixed income investments
- Regular savings are encouraged as an additional advantage for those saving with a whole life policy
- Favorable tax treatment is a relative matter, depending on changing individual circumstances and investment alternatives
- Life insurance policies can be used as collateral or security for personal loans
- Permanent insurance protection for the "whole of life"
- Life insurance proceeds are not part of the probate estate if named as the beneficiary of the policy
- Interest accumulated through the investment portion of a policy is tax-free until it is withdrawn