Whole Life Insurance
Whole life insurance is the most basic form of permanent life insurance. It provides a guaranteed death benefit, provided payment requirements are met, with tax-deferred cash value. Your regular payments (or premiums) are set at the time your policy is issued and will never increase. Interest is paid at a fixed rate and accumulates tax-deferred. It’s that simple.
Key Benefits of a Whole Life Insurance Policy
- Guaranteed death benefit1
- Level premiums that will not increase as you grow older
- Cash value that earns a guaranteed fixed rate of interest1 and grows tax-deferred
- Option to pay additional premiums to increase your policy’s cash value
- Access to cash value through tax-advantaged loans2
How Does a Whole Life Insurance Policy Work?
- You pay regular premiums.
- Premium charges are deducted from your premium.
- The remaining premium is applied to your account value.
- Interest is credited to your account value at a fixed rate and accumulates tax-deferred.
- Monthly insurance costs are deducted monthly from the account value.
- If you cancel (or “surrender”) the policy during your lifetime, you’ll receive the cash value minus any outstanding loans or indebtedness. Surrender charges may apply.
- The death benefit – minus any outstanding policy loans and interest due – is paid to your beneficiaries at death.
Whole Life Insurance Choices from The Hartford
1 Guarantees and benefits are based on the claims-paying ability of the issuing insurance company. Broker/dealers, insurance agencies and their affiliates who sell the policy make no representations or guarantees regarding such ability.
2 Both loan and withdrawals from a permanent life insurance policy may be subject to penalties and fees and, along with any accrued loan interest, will reduce the policy's account value and death benefit. Assuming a policy is not a Modified Endowment Contract (MEC), withdrawals are taxed only to the extent that they exceed the policyowner's cost basis in the policy and usually loans are free from current federal taxation. A policy loan could result in tax consequences if the policy lapses or is surrendered while a loan is outstanding. Distributions from MECs are subject to federal income tax to the extent of the gain in the policy and taxable distributions are subject to a 10% additional tax prior to age 59½, with certain exceptions.