Bonveda's Blog

Dan Theron

Are you wondering about the benefits of whole life insurance policies? Then you may read this article and get a quick and fast insight into the world of whole lifetime assurance.

Whole life insurance comprises life assurance plus an investment fund on which you are able to gain interest. It is an insurance policy that offers life coverage and an investment opportunity to you. The investment may be in bonds or stocks. The premium you pay is divided between the insurance and the investment fund. Term insurance covers the policyholder for the duration of the policy and has no investment tied to it. Both will pay out a sum of money in the event of your death to your beneficiaries.

Whole life insurance is a good deal more expensive than term life insurance. This is because it mixes term insurance with an investment fund. You consequently pay part of your premium for the insurance policy coverage and the other part for the investment fund that gains interest.

Your years may shape your insurance choices. A person older than 50 will typically have to pay bigger premiums for a term life policy. If you are 65 years of age and older, you may battle to discover an insurance firm that is willing to sell you term insurance. A whole life insurance policy may be a better option for older people because term life insurance gets progressively more expensive as you reach 60 years of age. You may consider buying life insurance once you have children, when your family does not have a lot of money saved or if you need to cover the mortgage and other heavy financial responsibilities.

There are a few different types of whole life insurance policies available at large. Single premium whole life insurance requires one relatively large premium payment up front. The policy is then fully paid and no additional premiums are needed. Indeterminate premium is similar to ordinary life insurance except that it allows for adjustable premiums. Level premium has premium payments that are level and are expected to be paid as long as the insured survives. A limited payment policy grants you lifetime coverage but involves only a limited number of premium payments for a fixed total of years. A non-participating whole life insurance policy has a level premium and face amount, but it does not pay you any dividends. A participating whole life policy pays up dividends. Dividends are a consequence of the actual life insurance costs turning out to be less than expected when determining the premiums.

There are some basic benefits associated with whole life insurance. The insured usually pays a level premium for whole lifetime assurance which normally does not rise as the insured matures. A whole life insurance policy includes an investment fund which may collect a cash value. A whole life insurance policy can also bring in dividends. The income on the cash value of the policy can be withdrawn or borrowed against in the form of a policy loan. Ordinary life insurance is perhaps an okay option because of the tax savings. The insured has lifelong coverage without any future medical checkups unless an alteration is made to the contract of the policy.

Remember that whole life insurance mainly offers life coverage. The cash value is just an added incentive. You can make an informed decision about the benefits of whole life insurance.

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