Cheap whole life insurance policies cover you for life. Generally your death benefit and premium will always stay the same. Cheap whole life insurance builds cash value which is tax-deferred until you decide to withdraw it or borrow against it.
There are different types of cheap whole life insurance. These include traditional, interest-sensitive and single-premium whole life insurance policies.
Traditional whole life insurance – This policy gives you a guaranteed minimum rate of return on your cash value segment.
Interest-sensitive whole life insurance – Provides a variable rate on your cash value portion which is comparable to an adjustable rate mortgage. This gives you the flexibility with your cheap whole life insurance policy such as increasing your death benefit without increasing your premiums depending on the economy.
Single-premium whole life insurance – This is great for individuals who have a large sum of money who would like to purchase their policy up front. This cheap whole life insurance policy also accrues tax-deferred cash value.
One of the features that make cheap whole life insurance popular is that a portion of your premium money goes toward your cash value which could pay off your entire policy after a few years. Another advantage is unless you make a change to your cheap whole life insurance policy, you will be covered for life with no future medical exams.
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