Life Insurance for Life: Getting to Know Whole Life Insurance
Whole life insurance is one of the most popular life insurance options in America for a reason. Unlike term life insurance, whole life insurance never expires, your rates won't ever rise, and whole life has the added benefit of acting as a minor investment account for the policy holder. The same reasons that make whole life insurance so attractive, however, also make it vitally important that you know your life insurance needs, understand the specifics of your whole life policy, and find a reputable provider before you sign any dotted lines. If you're considering a whole life policy to protect your loved ones, here are a few things to consider about whole life as you begin shopping around.
Whole Life Insurance Premiums Are Set for Life
While you'll pay more early on in monthly premiums for a whole life policy as opposed to a term life policy, your rates are locked for life and your policy will never expire. Why is that a big deal? Over the long term, a whole life policy can potentially save you thousands of dollars in premiums. According to business and finance expert Daniel Workman, the average annual premiums for a 10 year term life insurance policy increase by more than 30% between the ages of 30 and 40, by close to 100% between the ages of 40 and 50, and by nearly 100% again between the ages of 50 and 55. If you're not excited about a 250% rate increase in your life insurance premiums over 25 years, then whole life is worth looking into.
Whole Life Insurance Is for Life and Death
Whole life providers take a portion of your premiums each month and invest it. When that investment turns a profit, you get a cut. Because whole life policies have this investment and return component (known as the "cash value" aspect of your policy), you can take out loans against your cash value balance to help supplement college expenses for the kids, or an addition to the house to accommodate a growing family, to cite a few examples.
Make Sure Whole Life Is Right for You
Whole life insurance policies aren't for everybody. While whole life certainly provides long term benefits (especially for those able to invest in larger policies), higher initial premiums, extra management fees and commissions, and fluctuating investment climates can often add up to short term losses. That said, make sure you've clearly identified your goals, know the terms of your policy, and are being realistic about your expectations, before you commit to a whole life model to meet your life insurance needs.
Last But Not Least: Find the Right Provider
Finally, choosing a quality provider with a positive long term outlook is also important with whole life insurance. Remember, the goal is to carry this policy for the duration of your life, so it's important that your insurance provider is going to be there for you every step along the way, be next week, next year, or 50 years down the road. By soliciting quotes from an online quote service like NetQuote.com, you'll not only be able to compare rates and coverages in searching out the best value, but you'll also get the opportunity to compare the histories, longevity, and prospective futures of the companies you're considering doing business with.