Are your family members depending on your income? You can purchase a whole life insurance policy and secure the future of your family members. It is basically a contract between the policyholder and the insurance company. The policyholder purchases the policy and pays the premiums; in turn, the insurance company promises to pay the beneficiary a certain amount of money in the event of the policyholder’s death.
How it differs from term life insurance
A whole life insurance policy covers the policyholder for his/her entire life. There is no expiry date and the death benefits are received by the beneficiary only in the event of death of the policyholder. In case of term life insurance, the beneficiary is eligible to get the death benefits for a specific period. You may or may not renew the term life insurance policy after the term expires.
When to purchase a whole life insurance
Whole life insurance is a good choice when you want to get the coverage for your entire life. In addition to this, you may also opt for this insurance if you want to build up a cash value of your policy.
Benefits offered by whole life insurance
A whole life insurance policy offers a number of benefits that are listed below.
Interest accumulated on this life insurance policy is tax deferred until you withdraw from it.
You can take out a loan from a whole life insurance policy.
The premiums remain fixed throughout the policy term.
You can use the cash value of your policy to pay the premiums.
The beneficiary receives death benefits regardless of when the insured dies.
However, you need to pay a higher premium in order to insure your life through a whole life insurance policy. Therefore, before purchasing this insurance, it is advisable that you assess your financial condition and check whether or not you’ll be able to afford the premiums. If required, take help of an insurance agent to decide what type of life insurance is best suitable for you.