The Uses of Whole Life Insurance

By Compuquotes Team on August 14th, 2008

If you are looking for whole life insurance, then you need to decide between whole and term life insurance. To do that, you should carefully study the differences between whole and term life insurance to determine which is best for your life situation. Term life insurance is a short term solution, which can last up to 30 years. At the end of that term, the policy expires and you are no longer covered. Instead of this possibility, it is good to have at least some permanent coverage in the form of whole life insurance.

Whole life insurance is an insurance policy that will cover you from the moment of inception until either you die or you stop making payments on the whole life insurance policy. If your payments lapse because of your death, which is discovered later, then your whole life insurance policy is considered valid and comes into effect to protect your family from the costs associated with your death.

Whole life insurance is best used as an insurance policy to protect your loved ones from funeral costs and final expenses. A good amount of money may be $30,000 or more, most of which will likely go to the funeral and to the bills that you have left behind. A whole life insurance policy will not protect your family from large debts or from payments on something expensive like a house, however it will help with the immediate costs associated with losing a loved one.

Whole life insurance is best bought when you are young and healthy. The way that insurance companies make money on whole life insurance policies is through the interest that they make on investing your money while you are paying it. For a young, healthy person, the hope of the insurance company is that you will live a long, long time and make payments on your life insurance policy for your entire lifetime. These payments, then, can be much smaller because the insurance company trusts that you will live long enough to make it worth their while.

If you are older, middle aged, for example, then the whole life insurance company may charge a bit more so that they can make enough money on the whole life insurance policy to make it worth their while. While this policy might be more expensive, it is still worth getting now if you are healthy and think that you can afford it, because it is almost impossible to get whole life insurance when you are much older, even if your health is otherwise good.

For the elderly, whole life insurance, where you can get it, is usually too expensive to be of much use. The best answer here is actually to find a term life insurance policy that will cover the length of time, at least, that you think you might live. This is rather a macabre guessing game, and can be avoided by getting a whole life insurance policy when you are much younger and much healthier.

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