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Whole life insurance or permanent life insurance policies are those that will cover you for life. This is different from term life insurance policies that will usually cover the insurer for a period of about 10, 15 or 20 years. There are several advantages to having a whole life insurance policy, some of which are listed below. • Fixed premiums – Premiums are fixed for life. So, if you sign up now, you will pay the same premium that you are paying now even if it is 30 years in to the future. Other policies such as the term life insurance will reassess your premium payments and usually increase them substantially as time goes on. • Cash Value – The whole life insurance policy was actually brought about to create something called a cash value that was not available with term life insurance policies. For example, term life insurance policy holders can pay premiums for 20 or even 30 years and not have anything to show for it when their policy expires. A whole life insurance policy will however accrue a cash value over time. If one decides to cancel the policy at any time, they will have a cash value that they can withdraw. In some cases, the cash value might be tied up in investments and liquidity may be subject to the policies of the insurance provider. What are the types of whole life insurance policies? Traditional whole life insurance policy – This is where the policy will cover your death and cash value with a guaranteed amount. Your insurance agent will be able to tell you how much cash value you would have accrued at various stages of your policy. Variable whole life insurance – This is when your policy will cover your death with a guaranteed amount but will not be able to guarantee the amount you will have in your cash reserve. This is because it will be subject to speculative investments that are not guaranteed. These types of policies are usually chosen by financially savvy people who will be able to judge the future performance of the investment plans of the insurance company. Single payment – Wealthy people usually avail this policy by paying all their premiums in advance to avail an insurance policy. The advantage in doing this is that the whole expenditure on investment will provide tax relief. We hope this article would have given you an eye opener on whole life insurance policies. Thomas Ajava writes for LifeInsuranceLifeSettlement.com where you can get custom life insurance life settlement solutions to put cash in your pocket.
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