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Are there advantages to whole life insurance policies?

 We hear a lot about term life these days, and know that it is pure insurance with lower premiums This makes it very attractive to many consumers. But lots of people still buy permanent policies, so there must be some reasons. So how can we compare term life vs. whole life insurance?

Benefits of Whole Life 

The fact that whole life is permament should make the first benefit obvious. As long as the policy is kept in force, it will cover us. So we will have life insurance as long as it is paid for. This means it does not expire after a term. Many people like the fact they can pay for their policy over a period of years, and then enjoy coverage as long as they live!

The rates will also stay level, and so will the policy death benefit. This means that we do not have to worry about rate increases or benefit reductions. This is not always true of term policies. Rates may not be guaranteed for the whole term, and the death benefit may decrease.

Most of the time, death benefits are tax free. You can also enjoy the security of knowing that you will leave money to your beneficiaries without also leaving an additional tax burden. This is why many people choose to use life insurance as a way to transfer estates.

And the final advantage of permanent life insurance policies is the fact that they can be used to build up an asset. This benefit can be a great financial tool even if your beneficiaries do not collect the death benefit.

After the insurance account builds up a tax value, it can be cashed in or borrowed against. When you surrender your policy, the insurer will pay you the value of it. You may also borrow against that value as you would with other assets. In fact, you may even use this value to pay premiums if you need to cut your bills for awhile. All policies are different, so be sure and find out how your own policy works so you know how to use this asset.

Another use of permanent policies are lilfe settlements. This means that some investors want to purchase life insurance in return for cash. This amount of money will be less than the face value, but more than the surrender value. Sometimes a life settlement can be a great way to help seniors raise money with life insurance policies they really do not need.

Of course, we all hear a lot about term life. If you are shopping for a new policy, or evaluating your old policy, be sure and consider the benefits of whole life policies too.

Learn more about why seniors buy life insurance. Our fast and free forms can help you find the costs of life insurance for a person like you.

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