Advantages of Whole Life Insurance


There are many different forms of life insurance for you to choose from, when you seek insurance. One of them is whole life insurance, which though looks expensive upfront, is a great form of life insurance.

When you consider whole life insurance, a portion of the premium that you pay is used for paying the insurance part of your policy, another portion goes for paying administrative expenses while the remaining amount is used for supplementing the cash portion or the investment portion of your insurance policy.

You can cash in on a whole life insurance policy

The greatest advantage of a whole life insurance policy is that unlike the term policies, there is no rule stating the requirement of your death to realize some of your investment. This means that you have the right to cash in on the policy to withdraw the equity you have earned even when the policy is in effect.

This is because the cash portion of the whole life insurance policy belongs to the insured person where you have the right to policy loans. Moreover, whatever interest you may accrue through the policy with your investment to the policy is considered tax-free until its withdrawal.

Whole life insurance comes with fixed premiums

Another benefit is that you can use the cash value of the whole life insurance policy to pay premiums, if required. So if you have any unexpected expenses, it is possible to reduce or stop your premiums and continue with your insurance protection, if there is sufficient money accumulated in your account.

Another advantage of a whole life insurance policy is that it has fixed premiums. So regardless what your age or health may be like, you have to pay the same amount of coverage every year. There is no chance or worry of the premium amount increasing due to your aging or failing health.

To many, a whole life insurance policy provides a lump sum on retirement, if the policy is started early in life. This is because over the years, the premium investment builds up to a sizeable sum on retirement. This amount can be used for paying children’s education and as loan guarantees for a bank.

The wealthy should opt for a whole life insurance policy

To the wealthy, a whole life insurance proves to be very beneficial to them. This is because this policy provides them with an insurance trust that helps cover probate fees and inheritable taxes that heirs of large estates have to bear. This is why it can be said that whole life insurance is a must for the wealthy.

People over the age of 40 should consider getting themselves a whole life insurance policy. Even though the premiums may look expensive to them, in the long run, the person pays more with a ‘cheap’ term insurance policy than a whole life insurance policy.

On the whole, whole life insurance policies are the better option for insurance coverage. Compare different policies with the help of an expert actuary to choose the best whole life insurance policy offering maximum benefits.


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