Best Cash Value Life Insurance • Benzinga – Benzinga
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If you’re looking into life insurance policies, you might consider a whole life or cash value life insurance policy. You can tap into several benefits with a cash value life policy, and one of the most important is the portion of the policy that has a value that you can access when you are still alive. You can choose what you wish to do with the cash value portion of your policy, but you’ll face limits and caveats on how and when you can access the money. Plenty of quality insurance carriers offer cash value and whole life policies.
The Best Cash Value Life Insurance Carriers
The company that you purchase your cash value life insurance policy from is almost as important as the policy that you choose. Taking into consideration the policies offered and the riders available, the following are the best cash value life insurance carriers.
Northwestern Mutual
Northwestern Mutual offers 3 types of whole life policies, including traditional whole life, variable whole life and blended whole life. The traditional whole life policy accrues cash value like any other whole life policy while the variable whole life policy has a value tied to the stock market’s performance.
The blended whole life policy is a combination of whole and term life. This policy gives you whole life features eventually, even though it starts out as a basic term life policy. The whole life death benefit minimum is $25,000 for life policies. This provider also offers a good number of riders that can be added, which allows you to better customize your policy.
Types of plans
Universal, Term, Whole
Age Requirements
18 – 100
1 Minute Review
Northwestern Mutual offers a variety of life insurance policies that are suitable for a wide range of people. Policies are available in all 50 states, although some policies and riders may not be available in every state. The company has strong financial strength ratings and an above-average rating when it comes to consumer complaints.
To get a quote from Northwestern Mutual, you have to talk to one of its agents. However, you can browse information on its website and use the coverage calculator tool to estimate how much life insurance coverage is recommended for your family.
Best For
Affordable term life insurance that can be converted to a permanent life insurance policy later
Adding riders to a life insurance policy
Pros
Strong financial strength ratings and a low number of consumer complaints
Several types of life insurance policies available
Offers other financial planning, insurance and investment products and services
Cons
Lack of clarity about the product offerings on Northwestern Mutual’s website
Can’t get a quote or apply directly for a policy online
MassMutual
MassMutual offers policies with riders that can customize your policy to meet your needs and your insurance budget. It offers a number of policies which all differ on the amount of years that you need to pay premiums up to age 100. All MassMutual’s policies are eligible to receive dividends, which can help you compound the return on your initial insurance investment. MassMutual offers an accelerated death benefit rider as well as a renewable term rider.
Types of plans
Term, Whole, Universal, Variable
Age Requirements
All ages
1 Minute Review
Mass Mutual is great for people who are looking for one-stop shopping for a range of insurance and financial products such as life insurance, disability income insurance, long-term care insurance, annuities and retirement plans.
Mass Mutual is the short version of Massachusetts Mutual Life Insurance Company, and it is one of the largest life insurance companies in the United States.
Policyholders own the company as it is a mutual insurance company. When the company is prosperous, policyholders can expect to receive a dividend.
The company is popular because it offers a wide range of products, and the customer service department is reliable and responsive.
Best For
Males or females over the age of 18
Customers seeking a large offering of life insurance products
Pros
Wide range of life insurance products for term life, whole life and universal life
Claims accepted via email
No medical exam in some cases
Online applications
Dividends paid to policyholders
Competitive premiums
Cons
Medical exam generally required
No online application for some plans
New York Life
New York Life has been offering life insurance policies longer than any other company on this list. The two whole life policies it offers are whole life insurance and custom whole life insurance. The whole life insurance policy provides guaranteed coverage with cash value accumulation. The custom whole life policy allows you to take advantage of the cash value and lessen the number of years you need to pay premiums out of pocket. You can also maximize your cash value and pay premiums for as little as five years. New York Life also offers unique policy riders, including a rider for chronic care.
Types of plans
Term, Whole, Universal, Variable
1 Minute Review
New York Life offers a variety of life insurance policies, including term life insurance, universal life insurance and whole life insurance. Its policies are suitable for a broad range of people, are available in all 50 states and must be purchased through one of their licensed agents.
Learn more about New York Life Insurance with Benzinga’s review.
Best For
Consistent dividends
Consumers needing riders for specific insurance needs
Pros
New York Life has paid an annual dividend for 160 consecutive years
Several types of life insurance are available
Coverage can be customized with riders
Estate and wealth management services are offered
Cons
No online quotes or application
No mobile app
Mixed client reviews
State Farm
State Farm offers several whole life policy options, including a policy option that guarantees coverage for life with unchanging premiums. Other options available from State Farm include a single premium life policy that allows you to pay upfront for the policy with a single premium payment, limited pay life that allows you to pay off the policy in a number of years and final expense that is designed for older customers who need their end of life costs covered. Several riders are available, and policy owners have the opportunity to maximize their return with dividends.
Types of plans
Term, Whole, Universal
compare quotes
securely through State Farm’s
website
Age Requirements
18 – 75
1 Minute Review
State Farm offers a selection of life insurance products designed to meet the needs of most customers. All the basic policy types are covered by this national insurer, with coverage options that are easy for consumers to understand. Some less common types of life insurance are not well represented and, as always, customers are encouraged to get quotes from multiple insurers.
Best For
Customers who have existing policies with State Farm
Auto insurance is discounted up to 17% if bundled with life insurance through State Farm
Pros
State Farm website provides easy life insurance quotes and helpful information to guide the process
A nationwide network of over 18,000 agents provides access when questions arise
Sizable discount on auto policies for customers who also purchase life insurance
Cons
Premiums may be higher than some competitors, depending on individual rating considerations
Less flexibility in term lengths then some competitors
Guardian
Guardian offers two options for its whole life insurance policies. One option is level premium insurance, which is a type of policy that has stable premiums that don’t change. Guardian Life also offers limited pay insurance, which allows you to pay for the entire policy in a certain short period of time. Policies are able to receive dividends, and Guardian does not automatically deny coverage to applicants living with HIV. The minimum death benefit in order to get a whole life policy from Guardian is $25,000.
Types of plans
Term, Whole, Universal
Compare Quotes
securely through Guardian Life’s
website
What is Cash Value Life Insurance?
Cash value life insurance is a type of permanent life insurance, otherwise known as whole life insurance. Whole life insurance is a life insurance policy that offers coverage for life. This means that no matter when you die, your beneficiaries will receive your death benefit as long as you continue to make your premium payments on time and you don’t lie on your initial application.
A cash value life insurance policy also includes an investment feature in the form of a cash value. The cash value grows as you pay the policy’s premiums, as a portion of the premium is put into the cash value part of your policy every time you make a monthly payment. Over time, this money can compound and become an important component of your retirement savings. Though cash value policies are significantly more expensive than term life insurance options, this saving and investing component helps you to recoup a portion of the money that you spent on premiums, which you can access during your lifetime.
The cash value earns tax-deferred interest and most insurance providers, depending on the policy, allow you to withdraw cash or borrow against the cash value. This feature essentially allows your whole life insurance policy to double as an investment and a savings account that you can use while you’re still living. All life insurance policies have a death benefit, but not all of them have a cash value. If you’re interested in this type of policy, remember to shop for permanent life insurance coverage.
Benefits of Cash Value Life Insurance
While most people take out a life insurance policy to aid their family once they’re gone, a whole life policy actually has more to it. A cash value insurance policy can include the following.
Accrues cash value: The main benefit of this type of policy is the accruing of the cash value itself. This feature is considered a living benefit because you are able to access the cash value while you’re still alive. The cash value is stable and will never decrease on its own like other investments in assets like mutual funds or stocks. You can make tax-free withdrawals from it as long as the amount withdrawn doesn’t exceed the amount you’ve paid in premiums.
You can borrow against it: You are able to borrow against the cash value of your policy in addition to withdrawing the money. The loan that you take out against the value of your policy typically isn’t considered taxable income as long as the amount that you borrow doesn’t exceed the total amount of money that you’ve paid in premiums into the policy. However, you should keep in mind that you must pay the loan back while you are still alive. If you die before you fully pay back the loan, your insurance provider will take the remainder from the death benefit that your beneficiaries are entitled to.
Invests and grows your money: A cash value life insurance policy is a solid investment. You’re no longer just paying premiums for a death benefit, but you’re actively earning interest on your policy which grows your money. Over time, your whole life insurance policy can become an important source of funds for retirement.
Still has a death benefit: While the cash value aspect of this whole life policy is a major benefit, your beneficiaries will still receive the death benefit, which is why most people purchase life insurance in the first place. With a whole life insurance policy, your beneficiaries are also guaranteed to receive the death benefit, no matter when you die.
Serves as a sort of retirement plan: While you’re still alive, the cash value basically serves as a savings account that can be accessed when you’re retired and don’t have a steady income anymore.
Who Needs Whole Life Insurance?
Though a cash value life insurance policy can be an appealing investment vehicle, these policies are not for everyone. Because the death benefit of a whole life insurance policy is guaranteed to be paid out, these policies are significantly more expensive each month when compared to term life insurance options. Be sure to get quotes for both term and permanent life insurance before you invest in a policy to be sure that you’re choosing an option that fits with your home’s budget.
Frequently Asked Questions
What is cash value in life insurance?
1
What is cash value in life insurance?
asked 2022-02-18
Sarah Horvath
1
The cash value portion of a life insurance policy is essentially a savings account that you can access while you’re still alive. The cash value accrues over time with your whole life insurance policy and allows you to borrow against it, use it to pay premiums and access other opportunities.
Answer Link
answered 2022-02-18
Benzinga
Who gets the cash value in a life insurance policy?
1
Who gets the cash value in a life insurance policy?
asked 2022-02-18
Sarah Horvath
1
The policy owner gets to borrow against the cash value or withdraw a certain amount while still living; however, when the policy owner dies, the insurance company absorbs the cash value while your beneficiary receives the death benefit only.
Answer Link
answered 2022-02-18
Benzinga
