Are you thinking about buying a whole life insurance policy? If so, you’ve made an excellent choice to use life insurance to help secure the financial security of yourself and your family. 

Understanding Whole LIFE INSURANCE

Are you thinking about buying a whole life insurance policy? If so, you’ve made an excellent choice to use life insurance to help secure the financial security of yourself and your family. Whole life insurance can offer a lifetime death benefit, predictable premiums, and some features that may help build financial security while you’re still alive.

At The Insurance Hub, we know that each client has unique preferences and financial needs. We want to offer you the information you need to make an informed decision. We will also help you compare various life insurance companies and policy options to find the most satisfying solution


Should You Buy Whole Life Insurance?

When your grandparents shopped for life insurance, they probably thought of whole life insurance when they considered buying a policy to protect loved ones against an unexpected death. In those days, many people referred to whole life insurance as traditional life insurance. Recently, other types of life insurance policies have gained popularity, like term and universal life. At the same time, the simplicity and features of whole life insurance still make it an excellent choice for many people.

For example:

  • This permanent protection stays in force as long as you pay your premiums or have paid up your policy. Premiums remain level as you age, and it’s sometimes possible to pay off a policy to avoid making future premium payments.
  • Your policy can grow a cash value that earns tax-deferred interest or returns based upon a market index. You can sell the policy back to the insurer, withdraw cash, or borrow against the cash value. You may also have a chance to sell your policy for some percentage of the death benefit in a life settlement.
  • Some whole life insurance policies offer relaxed underwriting rules, so they’re available to older or infirm people that wouldn’t otherwise qualify for coverage. Thus, some families use their whole life policy to plan for funerals and other final expenses, pass wealth on to the next generation, or both.

Pros and Cons of Whole Life Insurance Policies

To understand the pros and cons of whole life insurance, compare it with term and universal life insurance.

Whole Life Insurance Vs. Term Life Insurance

Typical term life insurance will expire at the end of its term with no cash value or death benefit. Thus, life insurance companies charge considerably lower rates for term life because they take less risk and don’t need to fund a cash account.

At the same time, cash values for whole life insurance typically grow slowly. Thus, many prefer to pay less for a larger term policy and use the savings in other ways. On the other hand, the tax-deferred nature of returns can make them attractive compared to typical savings accounts or CDs and less risky than stocks.

Some families seek the best of both worlds. They might choose a larger term policy to cover growing families and a smaller whole life policy to provide additional protection after the term expires.

Whole Life Insurance Vs. Universal Life Insurance

Universal life insurance also offers permanent protection with more flexibility than whole life. For instance, you have some flexibility to determine how much to pay for premiums each month, but that amount can impact the death benefit. Universal life focuses more on growing a cash account than whole life, which centers on providing a fixed death benefit.

Thus, whole life’s fixed premiums and guaranteed death benefits make it easier to understand and incorporate into long-term financial plans. Also, many people can benefit from other financial products like annuities to save for retirement or other goals. The right choice between these two permanent life insurance policies depends upon your preferences and financial goals.

Is Whole Life Insurance Your Best Choice?

Whole life insurance policies vary considerably, from small burial policies to large ones to protect businesses and high-net-worth individuals. Many families use whole life insurance to build an asset, transfer wealth to the next generation, provide insurance business owners, or ensure the family has enough money to pay for a funeral and other final expenses.Contact an experienced whole life insurance agent at The Insurance Hub. We will take care to understand your unique situation, explain the benefits of various policies, and help you find an affordable and sensible solution


Check Out Our Other Services!

Schedule a consultation today.