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Do You Need Whole Life Insurance?

By Compuquotes Team on May 20th, 2009

Buying life insurance can be a major decision, especially when you want to make sure that the policy you purchase is going to meet the specific needs of you and your family. You might decide that you don't need life insurance at all, and even if you do want to purchase a life insurance policy you'll still have to decide whether a term life policy or a whole life policy will be better for your needs. While term life insurance is quite popular, there are some benefits offered by whole life policies that term policies just can't match. Whole life insurance isn't right for everyone, so make sure that you consider some of the following items to help determine if it's right for you.

One of the more important things to consider when deciding whether term life insurance would be a good choice for you is whether you want your policy to serve as insurance only or whether you'd like for it to have a separate value as well. Whole life policies gain value over time due to investments, and this value can be used to secure loans in much the same way that equity loans borrow against the value of a home. Since this feature is not offered with term life insurance, if you would like for your policy to have its own value then whole life is the way to go.

Whole life policies also take care of the biggest problem with term life insurance instead of the policy only lasting until the end of a specific period of time, your whole life policy will offer coverage to you until you pass away regardless of how long that is. This can allow you to guarantee that your family and other loved ones will be taken care of as you wish without having to worry about whether the term of your insurance will lapse before that time. If you only want your life insurance to provide coverage for you until your retirement fund kicks in or you're trying to make sure that your family will be provided for while the kids are still living at home, then you would probably better off with a term life policy.

One other factor that should be taken into consideration when deciding whether or not to buy whole life insurance is whether you can afford it or not. Whole life policies are generally more expensive than term life, and if the cost of the insurance that you buy is going to be a major factor then it's important to make sure that you can afford the whole life premiums. An increasing number of whole life policies are being offered with locked-in premium rates so that they won't continue to increase with time, but you should still make sure that you're getting a rate you'll be able to afford over the years before locking it in.

If you're still undecided as to whether you would benefit from a whole life policy or if term life would be better for you, take the time to talk to insurance agents about the differences in the policies. Express your concerns and what you're looking for and they will be able to answer your questions and provide you with additional information about whole life policies. This will help you to make an informed decision as to whether a whole life insurance policy is the right fit for your needs.

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