The thing that makes whole life insurance unique is the fixed premiums and fixed death benefits of this policy. Unlike term life insurance, which have to be replaced at a higher premium rate once they expire, whole life insurance provides premiums, which do not increase over time and your beneficiaries are guaranteed of a payout regardless of the age in which the insured passes away. The main advantage of whole life is that the policy will always be enacted regardless of whether the insured contracts a serious illness or becomes elderly when the policy is still in force.
The best cost of whole life insurance to select will depend on a number of factors. Many insurance advisors tell individuals to purchase whole life insurance, which is 5 to 10 times their annual salary. However, this can be impractical when someone is considering life insurance at a young age since the annual salary is bound to change over the years. There are other things to consider such as your assets and liabilities when purchasing whole life insurance. If you have more liabilities or financial obligations such as mortgage payments, credit card debts, and personal or business loans, then you should consider a higher death benefit.
Bear in mind that the cost of whole life insurance can be determined by the age of the potential policyholder. Younger people are bound to attract lower premiums. It is always best to purchase the amount of insurance you can afford. If your financial situation becomes better in the future, you can always buy an additional life insurance policy. In fact, you can complement it with term life insurance to meet all your coverage needs.
When you are considering the cost of whole life insurance, bear in the back of your mind that it can be a good form of investment. You can use it as a form of financial security considering the fact that this policy is tax deferred. As a policyholder, you will not have to pay taxes on any loan you take against life insurance policies.
The main factor that determines the cost of whole life insurance is the insured expected life span at the policy’s inception. Whole life insurance is generally more expensive than term and universal life insurance. However, the fact that it is a secure investment makes it worthwhile in the long run. There are also different payment options like the limited payment and single payment policies.