What is life insurance?
The term “life insurance” refers to insurance product offering guaranteed death values until an insured is paying premiums. In other words, whole life insurance is the insurance of whole life, with paying premiums and offering guaranteed death value. We can explain this as: When you get insured with a whole life insurance, you agree to pay fixed monthly premiums throughout your life and the company will return the money to your beneficiary after your demise. Most often insurance company may provide you with funds if you have deadly and critical health situation but then the amount after death will be as less as was spent for your medical supervision.
Who should buy whole life insurance?
Although anyone capable of paying monthly premiums can buy whole life insurance, but if you wish high degree of life protection and security and support your family members after your demise, you can buy whole life insurance.
Difference between term insurance and whole life insurance:
Term insurance offers the insurance for a specified time from the time of buying insurance. For example, in a term insurance, you are insured for next 12 years and after 12 years have ended, you are uninsured. While whole life insurance is the insurance for your entire life even if you are 100. Both the insurance have specific advantages and disadvantages.
Disadvantage of term insurance:
Term insurance is limited to specific years. You are uninsured after the period and if you got death after the period had expired, your beneficiary will never be get paid any amount of money.
Advantage of term insurance:
As whole life insurance requires high monthly premiums, some persons prefer term life insurance. It is useful only if you want to get yourself insured unless your children are 18. The theme is that if you die before your children are 18, they will be provided guaranteed funds.
Disadvantage of whole life insurance:
The only disadvantage that people mostly encounter is its higher monthly premiums. If you have sufficient funds or your company gets you insured, it is not a disadvantage for you.
Advantage of whole life insurance:
You do not fear of getting uninsured during your life. Even you are 100; you will be insured unless you are paying monthly premiums.
| Types of Whole Life Insurance |
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There are three basic types of whole life insurance, level premium insurance, limited pay insurance and graded premium insurance.
What is level premium insurance?
Level premium insurance is a type of whole life insurance in which premiums remains same throughout the life. In other words, premiums are constant from the beginning to the demise.
What is limited pay insurance?
The term refers that premiums will have to be paid within specified duration as agreed at the time of entering the policy. In other words, you have to pay premiums 5 to 10 years before the insurance policy is expired.
What is graded premiums?
The term refers that initial premiums are lower and later premiums are higher. The graded premium policy facilitates to those who has no sufficient funds at initial while years of buying insurance policy.
Conclusion:
There are three basic types of whole life insurance polices namely, level premium insurance, limited pay insurance and |
| Reasons to Choose Life Insurance |
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There are varieties of reasons to choose whole life insurance. Some of the most common reasons are below:
- Death benefits
- Premium for tem life insurance stay same
Death benefits:
Unlike term life insurance, whole life insurance facilitates the buyer that after his or her death, the beneficiary will be paid specific amount of money as agree at the time of purchasing insurance policy. While in term life insurance, after the death of the buyers, the beneficiaries of the buyers are not paid any amount of money.
Premiums for term life insurance:
Premium for term life insurance are higher at initial years of entering the policy while premiums for whole insurance remain same throughout the entire life. However, they are higher than term life insurance.
How to choose whole life insurance?
Sort out your needs for which you intend to buy insurance policy. If for instance, you need $60,000 for your children for his graduate after 3 years later, you may choose term life insurance, but in other cases, whole life insurance is ideal if you hope you will live more than 20 years more.
Conclusion:
Before choosing any insurance policy, it is necessary to sort out your needs, calculate monthly premiums and money required for future years.
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