Why consider whole life? These days, we see a lot of ads for term policies. Consumers are attracted the lower premiums of these temporary policies, and it seems logical to spend less money for more coverage! But many people still want whole life, so we need to explore the benefits.
The first advantage of whole life should be implied by the name. Since whole life is permanent, it will not expire as long as the policy is kept in force. Keeping a policy in force usually means the premiums are paid for, or the policy is paid up. In fact, you can pay up a whole life policy over a period of years, and then enjoy the security later. This may be a very good idea if you are doing some retirement planning.
Term policies may not have guaranteed rates over the whole length of the contract. In addition, the death benefit may not be level. Whole life policies have a level premium and death benefit. There are no unpleasant surprises to worry about.
Of course, the main use of life insurance is to pass on money after we die. Since most of the time our life insurance benefits are not taxed, we can pass on the full face value of our policies without worrying about sticking our spouses and kids with additional taxes to pay.
And the final advantage of permanent life insurance policies is the fact that they can be used to build up an asset. This benefit can be a great financial tool even if your beneficiaries do not collect the death benefit.
After some time, these policies actually build up a cash value. If you choose to surrender your policy, you may get accumulated cash in return. If your policy has a cash value, it may also be used to pay premiums if you lose income for awhile. Of course, you need to check with your own life insurance contract to see how this works.
These permanent policies can also be used for life settlement transactions. These are usually only marketed to older people. Investors purchase policies for an amount that is less than the death benefit, but more than the cash surrender value. This can be a great way for seniors to take advantage of unneeded life insurance.
Of course, we all hear a lot about term life. If you are shopping for a new policy, or evaluating your old policy, be sure and consider the benefits of whole life policies too. - 33372
The first advantage of whole life should be implied by the name. Since whole life is permanent, it will not expire as long as the policy is kept in force. Keeping a policy in force usually means the premiums are paid for, or the policy is paid up. In fact, you can pay up a whole life policy over a period of years, and then enjoy the security later. This may be a very good idea if you are doing some retirement planning.
Term policies may not have guaranteed rates over the whole length of the contract. In addition, the death benefit may not be level. Whole life policies have a level premium and death benefit. There are no unpleasant surprises to worry about.
Of course, the main use of life insurance is to pass on money after we die. Since most of the time our life insurance benefits are not taxed, we can pass on the full face value of our policies without worrying about sticking our spouses and kids with additional taxes to pay.
And the final advantage of permanent life insurance policies is the fact that they can be used to build up an asset. This benefit can be a great financial tool even if your beneficiaries do not collect the death benefit.
After some time, these policies actually build up a cash value. If you choose to surrender your policy, you may get accumulated cash in return. If your policy has a cash value, it may also be used to pay premiums if you lose income for awhile. Of course, you need to check with your own life insurance contract to see how this works.
These permanent policies can also be used for life settlement transactions. These are usually only marketed to older people. Investors purchase policies for an amount that is less than the death benefit, but more than the cash surrender value. This can be a great way for seniors to take advantage of unneeded life insurance.
Of course, we all hear a lot about term life. If you are shopping for a new policy, or evaluating your old policy, be sure and consider the benefits of whole life policies too. - 33372
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Are you shopping for life insurance?? Visit us : What is Whole Life Insurance?. We want you to understand the types of life insurance before you buy.
