Whole Life Insurance

The primary purpose of a whole life insurance (also known as permanent life insurance), just like any other form of life insurance, is to see that your dependents are protected and cared for when you die.  Through the hardship of losing a family member, those who depend on you for income to cover living expenses do not want to be bogged down with the added worry of finances.  Like any types of insurance, you need to investigate each type and find out which would best suit your needs.  Whole life insurance, just like any other, has both pros and cons.

What to expect with whole life insurance:

• Fixed premiums. No matter your age or health status, your premium is constant.  Unlike other forms of life insurance, the premium does not increase with age and the likelihood of death. 
• Policy is affected by market fluctuations.  Thus, you can end up spending more money on premiums with less coverage.  However, you could benefit substantially with less premiums and more coverage.
• Benefit of a cash surrender value.  This could also be called an insurance savings account that increases with time. This is the money paid by the insurance provider to the policy holder if the policy is ended early (by the holder) or when the holder dies.  The policy holder may also borrow money against this cash value anytime during the life of the policy.
• Tax free money for your successors.  Most policies include money benefits that are relieved of federal taxation.
• Insurance coverage for the policy holder’s entire life.
• Waiver of premiums if the policy holder becomes disabled (some restrictions apply).

Whole life insurance is a great plan for anyone who can afford the higher premiums early in life, desire insurance to last their entire life, and would like stability in paying the same fixed premium for the duration of the policy.