Whole Life Insurance Advantages and Benefits
By Marilyn Katz
Most of the time, insurance advisors want to discuss term life insurance. Because it is only purchased for a set span of time, or a term, the premiums are lower. For this reason alone, many agents probably believe that these sorts of temporary policies are more attractive to their clients. However, even though traditional policies may seem more expensive, it does have advantages that should be considered before taking out a long term contract like an insurance policy.
For one thing, whole life coverage will cover you for your entire life as long as the policy is kept in force. The policy will not expire. Furthermore, the premium rate you are quoted at 35 will be the premium you will pay when you are 65! Unless of course, you have purchased a policy that is designed to be paid up over a period of years. This is a great benefit. You can pay up your coverage over a period of years, usually ten or twenty, and then have the satisfaction of knowing that your life is covered forever!
On the other hand, some term policies do not guarantee that rates will remain level through the whole term. To guarantee that rate, you could have to buy an extra rider, and all of a sudden, that policy is not as cheap as it looked like before. If you do not make sure the premium will remain level, and you do not buy the rider, you could find your rates increased after five years. With a term policy, you will either have to accept the higher premium or lose the policy, with nothing to show for the years you did pay on it.
Another advantage of permanent coverage is that it can actually be used as an asset. When you build up cash value, you can borrow against that value. You can even choose to cash your policy in for the value. Of course, then you could be left without life insurance, but at least you will have some cash back for the premiums you put in. If you have a permanent policy, you can even choose to sell the face value of the life insurance policy in many states. The purchaser will continue making payments on the policy if it needs to be kept in force, but will pay a cash settlement to the insured person. For seniors on fixed incomes,
That is not to say that I am against temporary coverage. I would suggest making sure the premiums will stay level though and using the larger face values to cover a young family or house payments. But I would also consider purchasing a whole life policy. Because that term policy will expire, and then you will not have coverage at the very time in your life when it is difficult or expensive to obtain more insurance! So for many people, it may not be a question of which type to buy, but a question of how much of each one that you want!
Learn more about the Advantages and Benefits of Whole Life Insurance.
http://www.247quoteus.com/benefits-whole-life.html
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