Whole life insurance is a type of insurance that many people choose because part of the money you pay in premiums is invested and available for you to borrow against. It remains in effect as long as you pay your premiums, and once the amount is set, it remains the same for the life of the policy. You can also withdraw the money that is accrued. Keep in mind that it's probably best to withdraw the money only if it's really needed. If you take it out for unnecessary items, it won't be available when you truly need it.
Different than Term Insurance
Whole life differs from term insurance. With term insurance, the policy runs for a specific period of time. When that term is up you have to renew the policy. If your health changes you may not be able to take out a new policy, or if you can, the price may be greatly inflated. Your premiums also rise as you age. A whole life policy is in effect until you pass away.
Better Value
For those just starting out, a term life insurance policy may be less expensive, but keep in mind when the term runs out you'll have to renew--you will not be covered. If your health hasn't significantly changed, you should be able to get a new policy, but more than likely the premiums will be higher. As you get older, the payments will go up accordingly, and if your health has deteriorated you may not be able to renew at all. That's why many people consider a whole life policy to be the better value in the long run. Once you're locked into a premium, it won't change for the duration of the policy. The whole life premium may be more at the beginning but as you and the policy mature the premiums remain the same while term insurance premiums will more than likely become higher than whole life payments.
Multiple Options
One reason a lot of people select a term life insurance policy is that there are few options to choose from. With a whole life policy there are a lot of alternative choices. If you're considering a whole life policy you should consult with a knowledgeable insurance agent. Have them go over your options in detail. If you don't understand what they're saying, ask them to explain again, and again, if necessary. It's your money and your life. Before signing a whole life policy, make sure you fully understand everything that's contained in the document. A good agent will work with you to ensure you're aware of what you're getting into.
Types of Whole Life Insurance
Among the types of whole life insurance are non-participating, participating, indeterminate premium, economic, limited pay, single premium and interest sensitive whole life. The names of these types of whole life policies may vary from company to company, and there are variations within each category. As you can see, it is a complicated selection of choices and that's why you should have professional help in determining what would be best for you. You may also want to consult with an accountant or tax attorney to see if there are any tax benefits from a whole life policy.
Different than Term Insurance
Whole life differs from term insurance. With term insurance, the policy runs for a specific period of time. When that term is up you have to renew the policy. If your health changes you may not be able to take out a new policy, or if you can, the price may be greatly inflated. Your premiums also rise as you age. A whole life policy is in effect until you pass away.
Better Value
For those just starting out, a term life insurance policy may be less expensive, but keep in mind when the term runs out you'll have to renew--you will not be covered. If your health hasn't significantly changed, you should be able to get a new policy, but more than likely the premiums will be higher. As you get older, the payments will go up accordingly, and if your health has deteriorated you may not be able to renew at all. That's why many people consider a whole life policy to be the better value in the long run. Once you're locked into a premium, it won't change for the duration of the policy. The whole life premium may be more at the beginning but as you and the policy mature the premiums remain the same while term insurance premiums will more than likely become higher than whole life payments.
Multiple Options
One reason a lot of people select a term life insurance policy is that there are few options to choose from. With a whole life policy there are a lot of alternative choices. If you're considering a whole life policy you should consult with a knowledgeable insurance agent. Have them go over your options in detail. If you don't understand what they're saying, ask them to explain again, and again, if necessary. It's your money and your life. Before signing a whole life policy, make sure you fully understand everything that's contained in the document. A good agent will work with you to ensure you're aware of what you're getting into.
Types of Whole Life Insurance
Among the types of whole life insurance are non-participating, participating, indeterminate premium, economic, limited pay, single premium and interest sensitive whole life. The names of these types of whole life policies may vary from company to company, and there are variations within each category. As you can see, it is a complicated selection of choices and that's why you should have professional help in determining what would be best for you. You may also want to consult with an accountant or tax attorney to see if there are any tax benefits from a whole life policy.
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