| Topic : life insurance |
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Source : http://www.besttoread.com
Activity:
2 comments
323 views
last activity : 07 06 2010 20:18:04 +0000
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Term Life insurance sounds as the cheapest term for life insurance but its not only the last option left.
It is different from term life coverage when the face value is paid out upon your death, a whole life policy accrues a cash value.
In order for the cash value to increase, money over and above that which is necessary to cover the premium must be collected. Because of this, whole life insurance rarely will be the cheaper of the two.
With a whole life insurance policy, a portion of the premium you pay will be used to invest in mutual funds, stocks, bonds or other type of interest bearing investment.
Benefits of Whole Life Insurance One of its best benefits is that it will cover a person for his or her whole life. Once the policy is purchased, it will never have to be renewed. It will remain in effect until you die provided you do not allow it to lapse or be compromised in some other way.
And above all the amount you pay fot the premium so that the budget which you are planning for the year will also not be disturbed.
You can also borrow against the cash value just as you would another type of loan.
And the best thing is no approval is needed from others its only you has to decide on your decisions.
If in case you're not restricted to purchasing only the cheapest life insurance, whole life is an option worth considering. Universal life insurance, which is a variation of whole life insurance, gives you more flexibility in your premium, the term and death benefits, but this flexibility does come with increased risks.
Universal life insurance is flexible it is sometimes the cheaper of the two.
The potential disadvantages Whole life insurance does have its downsides. One is that it's not possible to guarantee a rate of return on your investment so it may not pay the dividends you expect.
Another fact worth noting is that a whole life policy probably won't have a cash value until a minimum of 3 or even 5 years so if you surrender the policy during this time, expect it to be costly.
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