Why You Should Get Whole Life Insurance
In the insurance world, there is an ongoing argument over which is better: whole life insurance or term life insurance. Both have their benefits and downfalls, and both are not for everyone.
So which is really better? We’re here to show you the good side of whole life insurance since it tends to get a bad reputation. There are a lot of benefits to whole life insurance that for some, out way the downfalls.
Here are some of the benefits to help get you on the path to finding the best whole life insurance policy for you.
Protection for Life
As you would imagine from the name, whole life insurance provides coverage for your entire life. Unlike term policies in which you select the number of years you want coverage, your whole life policy is always there. You won’t have to worry about the value decreasing or the policy expiring for as long as you are alive.
Another benefit for life coverage is you won’t have to reapply for your insurance policy. With term insurance, you will have to renew the policy to get more coverage or switch to a different plan altogether. This means your new monthly premium rates will be determined based on your renewal age and health status. The older you are, the more of a risk you become to the insurance company, which means higher premiums.
Premiums Remain the Same
With whole life insurance, your premium payments are locked in for the duration of your coverage. You won’t have to worry about renewing at an older age and your premiums increasing. So although premiums are more expensive at the start than term insurance, they could eventually equal out or become cheaper than term when you renew your policy.
Cash Value Investment
The cash value of a whole life insurance policy is an attractive feature of this type of coverage. You can almost think of the cash value as a savings account. A portion of your monthly premium payments goes towards the cash value. Each payment grows this value and is tax-free.
Although it is not recommended, you can take out the accumulated cash value of your policy. You can use the money for a down payment on a house, help pay for college or invest for your retirement. When you borrow against your cash value though, this is when it becomes taxable. Also, if you do not pay it back, the amount you borrowed is deducted from the death benefit.
Some whole life policies have a dividend feature. This means your policy earns money off of your insurance company’s profits. You can receive the dividend as a cheque, or you could put it back into your policy to increase its value.
These are a few features of a whole life insurance policy that make it appealing. As with any insurance policy, talk to a reliable and trusted insurance company to make sure the coverage you are getting is what you need.