If you have started looking for a good insurance
policy that will suit your life and the way you live, you have
probably run into whole life insurance policies. These life insurance
policies are more than just insurance, they are investments and
many of them promise a certain amount of equity and increased security.
What you may wonder is what you are paying for, and why you are
paying for it and how to keep your whole life insurance premiums
to a minimum!
Perhaps one of the best ways to investigate whole life insurance
policies is to compare them to the other side of the coin, that
is, term life insurance. Term life insurance has a set expiration
date, anywhere from one to twenty or more years in the future,
and at that point, the policy is up for renewal or is simply terminated.
Conversely, whole life insurance does not necessarily have an expiration
date. In addition, whole life insurance will usually have an investment
One thing you will notice right away is that whole life insurance
premiums are much higher than term life insurance, a difference
of price ranging in the hundreds of dollars. This is because whole
life insurance promises equity, and even a return of cash. In repayment
for this, the premiums start of high and remain high for the life
of the policy.
Dealing with the high premiums of whole life insurance is something
that you must consider before you purchase this sort of policy.
If your future is more uncertain, say, if you're thinking about
changing jobs or planning an extensive life change, this option
may not be for you. Security is one thing that is necessary for
a whole life insurance policy and while there is a great deal to
recommend it, the financial reality is one that first must be considered.
The cash value offered by a whole life insurance policy is not
something you can take, but you can borrow against it. Similarly,
if you decide to surrender the policy early, you can take the cash
you have built up. If this is something you need to do, be very
familiar with your policy and make sure you know what you can and
cannot do with it. Your premiums are kept high against this very
occurence and you will want to be familiar with any penalties you
One of the advantages of whole life insurance is that the rates
stay level during the time you own the policy. The premium, while
it stays high, will remain the same when you are twenty-five as
it will when you are eighty. This can be very beneficial, especially
when you take into the account the fact that the health care require
at one age will be very different from what you require at another.
While there are reasons and situations that could make whole life
insurance unsuitable for you, it is one option to keep in mind
and if you are interested the benefits provided, there is not reason
not to speak to your insurance agent. It is more than likely that
there is an option that will fit you, no matter what your criteria.