Whole life insurance is a type of permanent life insurance where coverage is active for the rest of your life. Even if your health declines as you age or you get diagnosed with an illness, your policy will remain in force as long as you make your premium payments, so you can provide a death benefit to your loved ones. For many, that's an important consideration.

Whole life insurance policies aren’t right for everyone. However, there are certain circumstances that make it a viable option for some. Here are some things to think about when considering a whole life policy.

Whole life insurance basics

Life insurance often gets broken down into two primary segments: whole and term, but there are differences. With whole life insurance, as long as you pay your premiums, your policy will cover you for as long as you live.

On the other hand, term life insurance covers a specified period, often ranging between 10 and 30 years, depending on the policy. Once that policy ends, if you want to continue to have life insurance, you will need to renew it or get a new policy.

Whole life insurance policies typically have a cash value component, as well. That means that there is a second part of the policy—in addition to providing traditional life insurance coverage—where a portion of the premiums you pay begin to accumulate cash value. The life insurance company will guarantee a set rate of return for the duration of your policy. That growth accumulates cash value on a tax-free basis, which provides some potential tax benefits over the long term. Note that cash value does not increase the death benefit. Due to the duration of the coverage, and the cash value component, it’s important to note that whole life insurance generally has higher monthly premiums than term policies. If needed, the available cash value can be accessed with a policy loan, but any loans taken on the policy will reduce the death benefit.

Guaranteed issue whole life insurance

Guaranteed issue (GI) whole life insurance is a type of whole life insurance that offers guaranteed acceptance for applicants, so long as they fall in the required age range. At Ethos, we offer a GI whole life policy that is guaranteed to all applicants between 65-85, regardless of any health issues.

What are some benefits of a guaranteed issue whole life insurance policy?

As with any life insurance policy, you want to take a look at the big picture before deciding on the best policy for your needs. Here are a few benefits of whole life insurance:

The security of lifetime coverage

Knowing that your life insurance will last the duration of your life, the guarantee of a death benefit payout (as long as you pay your premiums) is a significant benefit for many. Whole life insurance provides the added peace of mind that you will remain covered at the same rate even if you get a serious illness during the life of your policy.

Coverage for your final expenses

Today, the average funeral can cost thousands of dollars. Without a life insurance policy that provides a death benefit, those costs pass on to your loved ones. If you’re concerned about how you’re going to pay for your final expenses, a GI whole life insurance policy can provide valuable peace of mind.

A quick and easy approval process

Another added benefit to a GI whole life policy is it's just about as quick and easy as you can get when it comes to coverage approval. At Ethos, applicants from 65-85 are guaranteed to be approved—without needing to answer any medical questions or take a medical exam.

A policy that accumulates cash value

A whole life policy with cash value can help cover some financial needs while you're alive and help with some funeral and other expenses, once you've passed. Note that accessing the cash value early will reduce the amount of the death benefit paid upon your death.

Why guaranteed issue whole life insurance may not be right for you

While GI whole life insurance can be a good fit for some, it’s not meant for everyone. Here are instances where you might want to consider other policy options:

You want coverage for a specific time period

Some people prefer to have a policy that covers a limited time. For example, someone is only looking for 20 years of coverage until their kids reach adulthood, and then after that, they might not need or want a policy. In that case, a term life insurance policy would be a better fit.

More affordable premium payments

Typically, whole life insurance premium payments are higher than term life policies. If you're on a limited budget, you might want to consider more affordable options.

You’re far away from retirement age

Most guaranteed issue policies are only meant for older applicants. Our GI whole life policy serves applicants from 65-85 years old. So if you’re on the younger side, while whole life insurance still may be worth considering, a guaranteed issue policy won’t be available to you.

Sticking with the basics

While there are various life insurance options to cover all sorts of needs, if you're only interested in a simpler policy with no cash value accumulation, there are other policies that might be a better fit.

How to choose a whole life insurance policy that’s right for you?

You've given it some thought, and decided whole life insurance is a good fit, now what?

First, determine how much coverage you need. With Ethos' GI whole life insurance policy, you can choose from $10,000 up to $25,000 in coverage. This type of policy is a good fit for someone who is looking to use the death benefit for legacy planning, or covering their final expenses.

Next, understand the cash value component of the policy. While you are alive, depending on your policy and as long as your premium payments are up to date, you may be able to borrow funds from this cash value to cover retirement needs or emergencies.

Just keep in mind, any loaned or borrowed funds could potentially lower your death benefit if not repaid.

Finally, look at the approval process. What type of approval process would you need to obtain coverage? The beauty of guaranteed issue whole life insurance is that you’ll be instantly approved, no medical exam required. If you're older, have some health issues, or worry about being denied coverage, you can still qualify and get approved right away online.

Consider your options

When it comes to figuring out how to choose a whole life insurance policy that fits your needs, look at your options, your coverage needs, and your budget. If you want coverage that will help take care of your family, won't run out, and has a cash value component, guaranteed issue whole life insurance could be something to explore.

If you're over 65 and want to see what your whole life insurance options are with Ethos, it's easy to get started. Click here, and within minutes, you'll have a personalized online quote ready to go.