When you want to get life insurance, it can become difficult to choose the best option that is best for you, your situation and your family’s needs. There are a lot of different options for a lot of various types of life insurance and a lot of different life insurance companies. This is why you have to know what you buy and know for sure that the one you choose is truly the best option. With this article, you can find out more about whole life insurance, and gain a better understanding to make a wise decision for your future.
What is whole life insurance?
Whole life insurance is insurance that provides cover for the insured person’s entire life, provided they pay the required premiums. It is a contract between the insurer and the insured and providing all the conditions are met, the lump sum will be given to the beneficiary when death occurs. Whole life insurance policies are required to stay intact as long as the premiums are paid.
Whole life insurance consists of the insurance and an investment component. The insurance component pays a predetermined lump sum when the insured person dies. The investment component builds up a cash value which the insured person can withdraw or borrow against.
What are the benefits of whole life insurance?
- Cash value growth. Over time your cash value builds up with a fixed rate.
- Additional income. You can convert the cash value of whole life insurance into an annuity, which can provide you with additional revenue for life. This option may have tax implications and may not be available from all life insurance companies.
- Available cash. This type of policy provides you with the opportunity to borrow money from your investment and pay it back at a later time. Borrowing money will influence the death benefit if there is outstanding loan balance, and interest will also accumulate.
- Dividends. Some whole life insurance policies pay out annual dividends. But this is not guaranteed in all whole life insurance policies.
- Set payments. Whole life insurance policies have a monthly premium that is established for the life of the system without the possibility of change. Which means that the premium won’t increase as long as the policy is intact.
- Lifetime coverage. This policy provides cover until the death of the covered individual. There is no need to renew your policy from time to time.
The different types of whole life insurance
There are a lot of various types of whole life insurance policies to choose from, and it is critical to find out more about all the different kinds before you choose any specific one. Make sure the one you choose is the best one for your current and future situation.
Who needs this type of insurance?
There are a variety of explanations why people would want whole life insurance. Different people will use it for various reasons. Some people might get it to liquidate business debt. Other people might get it to pay off mortgages. Or to give to charity. And some people may get it to provide for family members left behind.
What can whole life insurance be used for?
There are different uses for whole life insurance. It can be used for estate planning. It can be used for funeral expenses. Income for surviving spouse and supplemental retirement income. It can also be used for business issues such as debt and supplemental executive retirement plans and deferred compensation.
Whole life insurance is a good option to choose for a lot of people, no matter what age. But there are also other kinds of insurance to consider before buying life insurance. With some research, you can get the best option for your needs. You can do research and find different quotes on websites like clearwave.co.za and be in a position where you know that the option you choose will be the best one. Because you will have to pay life insurance premiums for a long time, you might as well know that you have the best policy that will suit your needs and provide great benefit in the future.