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With whole life insurance, you get to decide how your dividends will be used. Here are some of the options: Purchase extra insurance coverage, which can increase your death benefit and collected cash worth quicker than your policy's original warranties. When you utilize your dividend to buy extra insurance coverage, it sets a new level of guarantee from which the policy's worths can't fall from one year to the next Minimize the quantity of premium you owe each year.

Your Northwestern Mutual monetary consultant can assist you figure out the best option for you. Your policy will build up cash worth that's guaranteed to grow over time and isn't tied to the stock marketmeaning it will not reduce after a drop in stock prices.

When accessing your cash value, you have a couple of options to consider. You can take a loan versus your policy from the insurer. Payment of the loan is versatile, however interest will accumulate. If you pass away with a loan against the policy, your survivor benefit will be reduced by the amount of the loan.

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This may be an excellent option if you have a monetary emergency situation or for larger, infrequent requirements, such as redesigning a home. When you surrender your policy, you'll no longer have your insurance coverage. In most cases, when individuals require to access their cash worth and no longer require their complete survivor benefit, they surrender a part of their policy.

This can also be useful from a tax viewpoint. In this case, you can take all the cash value in your policy, but you likewise give up all your life insurance coverage.

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If you're considering tapping into your cash value, your financial advisor can help you analyze the very best alternatives for your scenario. If you have an optional waiver of premium rider on your policy, the company will pay your life insurance coverage premiums if you end up being handicapped. Throughout this time, your money worth will continue to grow without you owing any cash for your policy.

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This advantage means that modifications in your health will not impact your capability to get more insurance coverage down the roadway. Whole life insurance can work together with other financial tools like investments and deferred earnings annuities in a complex technique to retirement savings. A research study by EY found that retirement methods including permanent life insurance and deferred earnings annuities excelled compared to investment-only approaches.

, especially during down markets.

Otherwise, if you access those accounts while they are down, you 'd essentially be costing a loss.

1 Investopedia. How Whole Life Insurance Coverage Functions. Upgraded May 07, 2025. . Accessed March 26, 2026. Content within this post is supplied for basic educational purposes and is not provided as tax, legal, health, or monetary suggestions for anybody or for any particular circumstance. Companies, staff members, and other individuals need to call their own advisors about their circumstances.

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Aflac life prepares A68000 series/Term Life: In Arkansas, Idaho, Oklahoma, Oregon, Texas, Pennsylvania & Virginia, Policies: ICC1368200, ICC1368300, ICC1368400. Whole Life: In Arkansas, Idaho, Oklahoma, Oregon, Texas, Pennsylvania & Virginia, Policies: ICC1368100.

B60000/Term Life: In Arkansas, Oklahoma, Pennsylvania, Texas & Virginia, Policies ICC18B60200, ICC18B60300, & ICC18B60400. Whole Life: In Arkansas, Oklahoma, Pennsylvania, Texas & Virginia, Policies: ICC18B60C10, ICC18B60100.

In New York City, Policy: NYQ60200M. Whole Life: In Arkansas, Delaware & Oregon Policy Q60100M. In Idaho, Policy Q60100MID. In Oklahoma, Policy Q60100MOK. In New York City, Policy: NYQ60100M. Not offered in VA. Receipt of sped up death advantages might impact eligibility for public support programs. Benefits might likewise be taxable, and are not anticipated to get the very same beneficial tax treatment as other types of accelerated death advantages that may be available.