Whole Life Insurance
A whole life term is a permanent life insurance policy, which is not restricting you to a specific duration of time. It lasts throughout the entire life. Whole life insurance offers a cash value and a death benefit. This is pretty much similar to a tax-deferred savings account, which you can maintain as an investment. Cash value in your life insurance policy would accrue interest along with time. In every month, a portion of the premium would get into the cash value associated with the policy as well. This is responsible for delivering a guaranteed rate of return to you.
Whole Life Insurance
Whole life insurance policy would be a permanent life insurance policy. In other words, the insurance policy would last throughout your life. It comes along with a savings component as well. This savings component is known as the cash value of the life insurance policy. It will grow along with the interest rate as defined by your insurance company.
Along with the whole life insurance policy, you will be able to receive a guaranteed minimum rate of growth for the whole life policy. However, the return you can get out of your investment can be small l when compared to the other investment options available. That’s because you will have to pay an administrative fee to the insurance company that manages the policy. An investment company will not usually do that.
Who can get a whole life insurance policy?
While life insurance is relatively expensive when compared to term life insurance. However, you will not be able to get coverage for your entire life. If you are in a good health and if you believe that you can live a longer life, going for a whole life insurance policy would be the best idea to consider. However, we encourage people with other investment avenues to consider going for this. That’s because you cannot consider whole life insurance as an investment method.
People who have high net worth usually tend to obtain whole life insurance policies. Even if you have a lifelong dependent, this will be a good insurance policy to consider.
The cash value associated with the policy would grow along with time. You will be able to withdraw that when it reaches a pre-defined value by the life insurance company. Or else, you can obtain a loan against that amount. This kind of life insurance policy is relatively more expensive than a term life insurance policy.