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Whole Life Insurance: The Safe And Secure Future

Apr 23, 2008
Every individual wants a safe and secure future and for this there are various types of life insurance policies are obtainable, where whole life insurance is the most common form of life insurance policy. The Whole life insurance policy covers its policy holders for her or his entire life; there is no particular fixed stop date of the policy. Even if the policy holders dies due to any reason the face value of his or her policy which is called as the "death benefits", is handed over to the beneficiary or the beneficiaries (the person or the persons name mentioned in the whole life insurance policy).

However, the cost of whole life insurance policy is extended across many years, thus the premium of the policy remains constant or same. This further ensures that old age policy holders on a fixed income doest not have to deal with the mounting premiums.

In addition, the whole life insurance policy unlike any other policy accumulates cash value eventually. If your call off the policy in between or after a certain amount of time has gone, the whole life insurance company will give back the cash value to you. Though, the cash value is programmed to match the face value at the time when the policy holder reaches the age of 100. Luckily, if you live that long, the whole life insurance provider will likely reimburse the face value to you.

However, this is not the only method to use cash value, in addition you can borrow some loan from the cash value, and the borrowed money has to be given back, but there are no obligations required to approve the loan or no risk of being turned down as you yourself are your lender. Moreover, few whole life insurance policy companies pay dividend as well, which further can be used to enhance your retirement income.

Let's discuss some of the features of whole life insurance policy in detail.

* Provides uninterrupted flow of money for the existing spouse, and also funds for children's education

* Supplement income at the time when earning power is damaged by accident or illness by covering medical expenses.

* Premiums usually are payable and level for entire life: since the premiums of the policy are level, thus the younger you are at the time when you buy a whole life insurance policy, the less costly the yearly premiums will be. However, some whole life insurance policy provider provides whole life policies which have shorter premium payment time, like one time or 15 years payments.

* Dividends: the whole life insurance policy certainly can earn dividends, dividends takes place when the actual life insurance costs turn out to be not as much as we assumed while setting our payments or the premiums. Nevertheless, few whole life insurance providers may give back a part of your whole life insurance premium as dividend as dividends are not guaranteed.

* Reliable cash values: unlike other life insurance policy which does not accrue any cash value, where as in whole life insurance policy guarantees you to reimburse some of the money you pay. In any case you want to surrender the policy; the assured cash value would be given back to you. Or, until the whole life insurance policy is continuing, you can take loan against them as policy loan that too at the present interest rates of policy loan.

However, the amount of the assured cash value totally depends on the type of whole life insurance policy you have, how long you hold it and also its size.
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