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Whole of life insurance its uses.

Apr 13, 2008
There are so many different types of life insurance out there. You might well ask yourself, since it's insurance, it is all the same does it really matter what I get as long as I get some insurance?

Well, if you do even the smallest amount of research on the Internet, you will soon realize that, not only does it matter, but also the differences are great and making the wrong decisions can be devastating to your financial situation both today and in the future. It is advisable that you take the time to research the options and apply your newfound knowledge to your own situation and let it help to guide you in your quest for the correct coverage to plan for your and your family's future.

As with everything else the price and conditions of life insurance are liable to change. The policy taken out a few years back, whilst it was perfect for you then, may not ideally suit your current situation and it may surprise you to find that in your current situation your premiums could actually be lower. This in itself is worth looking into, along with researching what other financial institutions are offering for the same coverage. There are many different deals to be had so look around.

You may find that your personal situation has changed to the point that the life coverage you had before has little or no relevance to your current situation. The policy you took out initially may have been perfect then, but is perhaps in need of a facelift now. Maybe you have started a family and now have children, or you may have given up smoking. Perhaps you have stopped or indeed started practising a dangerous sport. Either way, any or all of these new circumstances can and will affect your monthly premium payments.

The beauty of the web is that now individuals can go online and get the best deals, saving both money and time, when sourcing life insurance policies. Since there is no agent to deal with as an intermediary the companies can pass on this cost saving in the form of a reduced premium. Now it can be said that you are losing something in the way of a personal touch by not having an agent to talk to face to face but many customers find that this small setback is favourably offset by the savings incurred by dealing with the companies directly over the internet. Really this boils down to what suits the individual best.

So, what EXACTLY is Whole of Life Insurance?

In simple language, a whole of life insurance policy will cover you until the end of your life whereas the other sort of policy is for a specific length of time and is called a term policy. Usually with whole of life policies your death benefit and premium do not change. They remain constant. The advantage of this policy is that it continues to increase in value through life as you continue to add to it. The value of this increasing nest egg is tax exempt until you decide to cash it in, when you will more than likely be in a lower tax bracket anyway and so will be able to borrow money against it to help out with life's many obstacles.

One of the main reasons that people tend to go for whole of life policies as their policy of choice is that an allocation of the premium paid actually goes towards building a store of cash which could in theory be used to pay off the whole cost of the policy in a relatively short timeframe. Also, unless you decide to do otherwise, your payments can remain constant throughout the policy so that your costs do not change but neither do the terms of the policy. You are covered for life and will not have to undergo any extra medical exams. Once you have started coverage, your insurance cannot exclude any specific illness or event from coverage. This is very important when serious illnesses can completely restrict you from earning in later life.

To summarise, whole of life insurance is one of many options available, but is undoubtedly a good choice for many people wanting to provide a comfortable future for their family and for peace of mind financially now and into the future.
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