Whole Life Insurance: Making Things Permanent
We all love the sense of security and stability permanence brings. With the right preparation, it means we can live with surety, certainty and peace of mind. And by preparing for the future with whole life insurance now, we pass that security on to our loved ones, leaving them what they need to carry on permanently in our absence.
If you've never bought life insurance, or if you don't know what a whole life policy is all about, this information is for you. It'll help you get educated now so you can provide for your family later—the responsible thing to do.
In It for the Long Haul
Also known as permanent or cash-value life, whole life insurance insures you forever, no matter how long you live, as long as you pay your premiums.
When you buy your whole life policy, your insurance company charges a premium that, in the early years, is higher than what's needed to pay claims. The extra money is then invested and used to supplement those level premiums as you grow older and the cost of insuring you increases.
Why would you want to buy a policy that charges more than necessary in the beginning? Remember, you're trading a slightly higher price for the reassurance that your life insurance premiums will remain steady—no matter what—as long as your policy is in effect. That means easy budgeting and steady payments. So if you're looking for a policy with predictable premiums, whole life is probably your best bet.
Giving You Options
With whole life policies, your insurer pays a periodic dividend into your account, which also causes its value to grow over time. If you later find yourself in a bind, you may then borrow against the accumulated monies. However, keep in mind that this reduces the value of your benefits; so if you die before paying it back, the amount your loved ones receive at your death will be deducted from the policy's total value.
When the amount you've paid in premiums reaches a certain level, you have two choices: to discontinue the policy and cash it in, or continue on with your original whole life insurance policy. Since providing for your loved ones is the key here, discontinuing your policy should be done with great caution and on the advice of a professional financial advisor or your insurance agent.
What's in It for You?
In review, if you're looking for insurance with lots of options, consider whole life insurance. It offers you several benefits:
- It insures you for life.
- Your premiums never increase.
- It builds cash value you may borrow against.
- It gives you the option of either cashing it in or canceling it completely.
Though whole life policies cost more than term insurance, the flexibility and long-term financial security they offer are often worth the extra expense, especially in an inflated economy. So consider this carefully when deciding which type of policy works best for you.
Securing Their Future
Now that you have a better understanding of whole life insurance, start making things permanent. All it takes is a few minutes and a little information to secure your family's future.
Regardless which type you settle on, buy life insurance now. Your loved ones will thank you for it later.
