Whole Life Insurance: Stability Worth Paying For

In these days of financial uncertainty, it’s nice to know that even if you can’t personally define whole life insurance, you can rest assured that, regardless of the company you purchased it from, if you have it,  it isn't going to disappear just when you need it.

If you don’t have life insurance, probably the best thing you could do for your family is to purchase guaranteed whole life, simply because you are giving them some stability in the event of your death that you can’t give them in any other way.

There are a lot of reasons for purchasing life insurance, and a lot of things life insurance will do other than just helping someone put you in the ground. However, all the intended purposes for individual life insurance can be boiled down to just one—love. You purchase life insurance because you love someone who will benefit from the policy, someone whose future you are willing to protect even though it might mean trimming the family budget  in order to make the premium payments.

No one would challenge your concern for your loved ones; but even the most affluent people want as much as they can get for as little premium as possible. Consequently, many people end up with Term Life because it has the lowest premium. Term may indeed be the policy that satisfies your need, but before you make a decision that could haunt you and your family in later years, you need to understand the difference between Term and Whole Life insurance.

Term Insurance is exactly what it sounds like—coverage for a period of time. At the end of that time, you either renew for a dramatically increased premium, do without and hope you will outlive your whole family, or convert to something that will last the rest of your life. No matter what choice you pick, the cost will be much greater than it would have if you had chosen whole life in the first place.

Guaranteed whole life is trouble free with a premium that will never increase and a benefit that will never decrease. If for some reason you decided that you didn't need it in later years, you could surrender it for the cash value which could be added to retirement funds. If you had an emergency, you could borrow some of the cash, something you can’t do with a Term policy.

The primary problem with whole life insurance is that the average young person does not understand the need and dramatically under-estimates the amount of money it will take to provide for a spouse and family if a disaster occurs. The meager $25,000 to $50,000 policies people often purchase after they retire don’t begin to replace the lost income of a spouse, but are often the only thing a person can afford once they are living on retirement income. That same policy could be purchased at several times the face value and a fraction of the cost if purchased when the individual is young—say in one’s 20s or 30s.

Don’t wait until you are ready for retirement and faced with limited options due to health and income. Get quotes and take action today.