What is Whole Life Insurance and Do You Need It?
I cannot count the times I have been asked;
What is whole life insurance?
Whole life insurance can cover you for your ‘whole life’. As long as you continue to make the premium payments on the policy, it should stay the same for as long as you have it.
These are a few features you should know about whole life:
1. Builds cash value
2. Considered an Asset
3. Premiums stay the same entire life of insured
4. Can take a loan out against the cash value
5. Is considered a permanent policy
6. Is a policy that covers the life of the insured for the specified face amount over their entire life. In the event that the insured dies the face amount will be distributed to said beneficiaries. This is a simplified explanation.
7. Whole life is much more expensive than Term life products.
8. Can be a good product if the insured has limited investments. May not own a home or does not plan to purchase a home. Has little equity and or net worth.
9. Whole life may be a good solution if the insured is looking for a very stable low yield product that also pays a death benefit to beneficiaries.
Need Whole Life?
I think this gives a pretty good idea of what whole life insurance is and how it may benefit you. If you think that term life insurance could be a better fit for you try this link for a description of what is whole life insurance compared to term life insurance.