Advantages Of Whole Life Insurance
Whole life insurance is a type of policy that will pay out to the insured's beneficiaries or estate upon his/her death. The benefits are generally paid for a set term regardless of how long an individual covers, but some policies may also be paid out in cash at one's death.
The most significant advantages of whole life insurance are that premiums don't increase throughout the policy and can remain low; that the insurer can't cancel your policy without cause; and that it provides certainty in terms of continued coverage. For example, if you die while uncovered, you won't have to worry about your beneficiaries being left with a gap in coverage because your payments would have been made up by the insurer.
Whole life insurance can also be converted into a cash value, which can provide some other advantages. If you've taken out the policy to help pay for your children's or grandchildren's college, you may be able to access some of the cash value so that they have enough money to pay tuition. However, this only applies with universal policies; term policies don't have a cash value.
Another advantage of whole life insurance is that it doesn't have any associated expenses such as administrative or mortality fees; the policy itself is sold and priced by the insurer, and all that the insured has to worry about is getting coverage. This is different from other types of insurance, so if you're considering a whole life policy, it's important to understand the differences between term and universal policies.
Whole life insurance can be purchased with lump sum premium or for monthly payments. It doesn't matter whether it's a term policy or a universal policy; all that's needed is to know how much coverage you need to get in return for each premium that you pay. Generally, there are two options: 1) five year terms and 2) ten year terms. However, some policies may also offer 10-15 years or 20+ years. Depending on your needs and your budgeting abilities, one of these options might work best for you.
If you're going to pass away after the policy term, your premiums will be used by the insurer to cover any outstanding death benefits that you've purchased. If you're going to pass away after the 10 year term, for example, but before 20 years is up, then a little bit of each premium that you pay becomes a cash value that can be used for college tuition and other expenses. On the other hand, if you've bought an inflation protection rider and your family income is rising with inflation, then your premiums will offset any increases in payments when they have to be made.
The above advantages are just some of what whole life insurance offers as a financial product. If you're interested in learning more about any other features, then it's best to contact your agent or a licensed insurance professional who can explain the details of your policy.
Category: Insurance Tags: Articles, Life Insurance, Whole Life Insurance
ARTICLE SUMMARY
There are many different types of policies available for families, businesses and individuals. Regardless of what you're looking for in terms of financial protection or investment opportunities, you have to be sure that you know what each policy offers and how it will benefit you as an investor. In some cases, it's possible to use a combination of several policies to get the best results over time; however, there are also some instances where combining policies is counterproductive. For example, if you're looking for a way to save for your retirement and you make an investment with a whole life policy, then that policy will have a cash value. It can be tempting to try to use this cash value at retirement; however, this can result in your beneficiaries getting less upon your death. Make sure that you understand the advantages and disadvantages of each type of coverage so that you can invest wisely and protect your family if anything were to happen down the line.
In some cases, it's possible to use a combination of several policies to get the best results over time; however, there are also some instances where combining policies is counterproductive. For example, if you're looking for a way to save for your retirement and you make an investment with a whole life policy, then that policy will have a cash value. It can be tempting to try to use this cash value at retirement; however, this can result in your beneficiaries getting less upon your death. Make sure that you understand the advantages and disadvantages of each type of coverage so that you can invest wisely and protect your family if anything were to happen down the line.
It's also important to remember that policies can cover different periods of time and may have varying associated costs. The biggest difference between term life policies and universal life policies is that the latter type offers both death benefit and cash value. This can be a tempting option, especially if you're looking for an investment vehicle; however, when it comes to whole life policies, there are two types with different costs and benefits. For example, if you were looking for a whole life policy for your children's college education, then universal policies might work well for you. On the other hand, if you want to stick with term coverage for college costs but combine it with an investment plan that only involves variable universal life insurance coverage, then you could be saving yourself money on premiums by going this route.
It's also important to remember that policies can cover different periods of time and may have varying associated costs. The biggest difference between term life policies and universal life policies is that the latter type offers both death benefit and cash value. This can be a tempting option, especially if you're looking for an investment vehicle; however, when it comes to whole life policies, there are two types with different costs and benefits. For example, if you were looking for a whole life policy for your children's college education, then universal policies might work well for you. On the other hand, if you want to stick with term coverage for college costs but combine it with an investment plan that only involves variable universal life insurance coverage, then you could be saving yourself money on premiums by going this route.
The major difference between these two types is that whole life policies offer a death benefit and cash value during the term of the policy. On the other hand, universal life policies invest premiums in order to create a cash value during the term of the policy. However, unlike policies where you purchase a death benefit and let it run until your death, universal policies let you determine how much cash value goes into your account each month.
Conclusion
Understanding the differences between whole life and universal life policies can help you to decide whether or not it's a good idea to invest in one of these options in order to protect your family if anything were to happen down the line. It's also important to remember that policies can cover different periods of time and may have varying associated costs. On the flip side, however, if you're looking for an investment vehicle, then there's nothing wrong with combining whole life coverage with variable universal insurance coverage. As long as you understand that both types of coverage have their strengths and weaknesses, then you'll be able to make informed decisions about what works best for your situation and situation.