Best whole life insurance

According to Wikipedia, whole life insurance, sometimes called “straight life” or “ordinary life,” is a life insurance policy that is guaranteed to remain in force for the 

insured’s entire lifetime, provided required premiums are paid, or to the maturity date. As a life insurance policy, it represents a contract between the insured and insurer that as long as the contract terms are met, the insurer will pay the policy’s beneficiaries when the insured dies. 

Whole Life Insurance Explained

The first thing to know is the difference between term and whole life insurance. It will help you understand the entire life better. With term life, you can get temporary insurance coverage with death benefits. 

When it comes to getting the best whole life insurance, an insured can get death benefits with an added feature. This additional feature is the cash value component of the policy. Typically, part of the premium is used for building cash value over time. It is an account with interest, so cash value from your premiums adds up to increase your cash account in the policy. 

Whole Life Insurance Pros and Cons

Surprisingly, there are many advantages that one can reap out of getting  the best whole life insurance policy. Let us find out each benefit and know if it is applicable for you. 

Pros

It is Lifetime Coverage

It offers coverage and security as long as you live. All premiums you pay for the entire life of the policy is guaranteed. The truth is that it has a higher monthly premium than term life. Although it is a bit expensive, it leaves you with peace of mind knowing that it will not expire. There is no need to worry that it will pass and go through the initial process to renew your policy. 

Having the best whole life insurance policy can assure you that your family is covered if something terrible happens to you. It can become a source of income after your death or pay unpaid debts. 

It is a fact that life insurance gets expensive as you age. By the time you need to renew your term, you might be already in your 50’s and the premium might shock you. As you restart the term, you will not pay the same rate. You may need to undergo underwriting and take a medical examination. The result of the underwriting and you’re medical test results will determine the best whole life insurance cost. With the best whole life insurance, you will pay the same rate for a lifetime. 

Is Whole Life Insurance A Good Investment

With the buildup of cash value, one of the main benefits it can offer is getting loans from a policy that is non-taxable. Therefore, one becomes at peace, knowing that the money you borrow from the cash value is non-taxable. Also, death benefits are not taxable by the time that your beneficiaries will make a claim. 

It is a Guaranteed Policy

Many policies under whole life are sold as guaranteed. All paid premiums and an interest rate are guaranteed. However, some may think that the investment return may be low, but this is not the case for every policy. In times when the economy is at its best, the interest rate will surely go up. However, when it falls, then you will only get a minimal amount of ROI. Whatever it may be, the important thing is that you will acquire guaranteed benefits and cash value. 

A loan from the Cash value

Another great thing  is that you can  get the best whole life insurance without a medical exam or with a medical exam is that you can borrow from it. Borrow against the policy’s cash value. However, borrowing is only possible after a certain number of years. Also, only a portion of the accumulated cash value is available for a loan. The policyholder may use the money for whatever purpose. 

Moreover, you will have an option to repay what you borrow or not. In case you choose not to pay back the loan, it might affect the value of your death benefit. It can happen if you die after borrowing money against the policy. 

Cons

Disadvantages Of Whole Life Insurance

There is always a wrong side to anything. Although whole life is a smart choice for those who want some cash in the future, it may also have some disadvantages. Here is the other side of the story when it comes to getting the best whole life insurance policy.

It is Expensive

There is no such thing as cheap whole life insurance when compared to term life. The reason is the fact that it covers the feature of cash value accumulation. It means that the more extensive coverage you buy, the more expensive it gets. Therefore, policyholders need to read and understand the fine print in detail. It is to find out any exclusion and how long is the guaranteed period. You need to become a wise policy buyer, so you will not experience a future problem.

Lower Interest Rates

If you are interested in investing and earning more money, then this policy might not suit you. The interest rates that it will achieve in the future are less than what you can get if you invest in an indexed universal life insurance policy. Also, money market, mutual fund, interest making investments, and stock market are some platforms to earn a better interest rate. However, remember that these options are for risk-takers. If you are not willing to risk money in these investment platforms, the  best whole life insurance policy might be a good fit for you.

It is an Inflexible Option

When compared to other types of insurance coverage, the best whole life insurance is the most limited option. You will not get any input on how they use your premium, how much of it is invested, and how much cash goes to the cash value accumulation. 

Therefore, you do not have the power to change any policy portion according to your advantage. On the other hand, a universal life insurance policy is different as you can make alterations. It can offer you the freedom to change death benefits and flexibility in paying monthly premiums.