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With a whole life insurance policy, you will leave money behind for your loved ones, but this type of life insurance policy offers great rewards while you are living as well. The advantages of whole life insurance are that it gives you benefits while you are living and after you have passed away also. Think of like buying (whole life) vs renting (term).
Living Benefits
The cash value that a whole life insurance policy builds can be used while you living. It can build up over several years of funding the policy and then give you an amazing opportunity to have access to cash in times of need. Your cash also earns dividends paid by most insurers. The cash value can also be used to pay up premiums and eliminate future premium payments.
In Contrast to a Term Life Policy
In contrast, to say a 30-year term life insurance policy, which pays a death benefit only if the insured dies during a specified period of 30 years, a whole life policy provides for the payment of a death benefit regardless of when the death occurs in someone’s life.
It is this benefit – protection for the whole life that gives this insurance policy its name. This expression has no meaning to in which the premiums are paid, only to the length of protection. If the premiums are to be paid throughout one’s lifetime the insurance is known as ordinary whole life. If the premiums are to be paid only in a specified period it is known as limited payment whole life insurance.
You get what you pay for
The cost for whole life insurance coverage is much more expensive than a comparable term policy. Whole life is one of the most well-known options when it comes to life insurance. It’s also the most expensive life insurance policy. The cost for whole life insurance coverage can be up to several times more expensive than a comparable term life insurance policy. The reason whole life is so expensive it because it ultimately the policy will pay out the death benefit in one way or another. One way it will pay out is by death the insured, the other way it will payout is by an endowment. When a whole life policy endows it means the cash value equals the death benefit which happens at age 100.
If your looking for just a cheap life insurance policy and because that is all you can afford currently, you should be looking into a 10-year term or a 20-year term to find something that will fit your budget.
Leaving your family well provided for when you pass away is something that most people are concerned about. The ability to grow your money in the meantime though is very reassuring. These are the advantages of whole life insurance that are so beneficial to the consumer who is shopping around for that perfect life insurance plan.
We represent over a 2 dozen whole life companies. Call today to talk to an agent and we can help you compare whole life quotes.
In Summary
- Provides protection against long range and permanent needs
- Accumulates a savings fund that can be used for everyday purposes or to meet specific needs
- Pays beneficiary no matter when time of death
