What Everyone Needs to Know About Whole Life Insurance


One of the most important financial decisions that anyone will ever make is finding the absolute best life insurance policy. For many, this will mean a whole life insurance policy that will provide their loved ones with financial security in the event of their death no matter when it takes place. While thinking about the possibility of dying is never an easy task, it is absolutely vital for anyone that has others financially dependent on them to take a look at how whole life insurance could help their family after they pass.


Categorizing Life Insurance

Those that first begin to explore their options for life insurance are often overwhelmed about just how many choices they must make. Unlike many other forms of insurance, life insurance is a relatively complex financial service that requires some research in order to make the most out of it. The average person will need to initially make a choice between term life insurance and whole insurance. As the name implies, whole life insurance will remain active throughout the insuree’s life while term life insurance will have an expiration date. Whole life insurance is also referred to as traditional whole life, continuous premium whole life, and straight life insurance.

Understanding the Basics

When exploring one’s options for whole life insurance, it is important to think of these policies as an investment vehicle as well as a life insurance policy. Whole life insurance is often used as a way to build and save personal equity that can be withdrawn at a later time. The insuree can begin by speaking with an insurance provider to explore how large of a policy they would like. At minimum, most of these policies will cover funeral costs and any other expenses associated with one’s death. Larger policies can be crafted to cover practically any financial burden that surviving loved ones will experience in the future.

Whole life policies are often purchased in order to help a spouse or one’s children pay off any major financial burdens that they will have over the years. By exploring these larger expenses, it is easier to get an idea about exactly how large the policy should be. Some of the most common expenses that are covered by a whole life insurance policy include tuition for college, finishing off one’s mortgage, or paying off any lingering debts. This is especially important for anyone that is the primary contributor to a family’s income.

The Benefits of Whole Life Insurance

Finding the best life insurance policy is a personal choice for everyone, but whole life insurance does come with a few major benefits. While the premiums are typically higher, you can rest assured that your family will not struggle with any major financial burdens after you have passed away. This can be compared to term life insurance that eventually will expire and provide a family with absolutely no financial assistance after the policy is no longer active.

Whole life insurance polices are also an option for those that are looking to invest some of their money. Part of the premiums that are paid into a permanent life insurance policy actually go into an investment fund as well. As time goes on and the fund continues to grow, the insuree will have the option of withdrawing some of the funds. This is not ideal in every scenario, but it can be a good option to borrow against a whole life insurance policy in order to pay off any future high interest debts such as college tuition.

Is Whole Life Insurance for Me?

Before deciding on whole life insurance, it is important to consider anyone that is financially dependent on you and then decide what they would need when you pass away. In the end, whole life insurance is an excellent way to guarantee death benefits, cash value, and premiums so that you can plan for your financial future.

Howard Fritz
My name is Howard Fritz. I'm a full-time blogger for who loves to share finance & business news. In my free time, I love to learn, read, and travel.

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