When you are thinking about financial future of your loved ones, whole life insurance could be more than useful. Many people are using life insurance policies to make sure that everything they plan will be covered if something should happen to them.
People usually use life insurance to protect their loved ones, business or making sure they will have their final expanses covered. Some people want life insurance policy that gives you option to borrow the money in case of emergency, before the actual and agreed pay-out. In those cases, whole life insurance is everything that you are looking for.
Which Life Insurance to Choose?
In some cases, it is simple to choose between whole life and term life insurance, depending if you need big or small coverage, or you need permanent life insurance or protection on certain period of time. If you are looking for a huge coverage, or a policy that will protect you until the end of your days, whole life insurance is the perfect choice for you.
Depending on your age and your health, there could be a huge price difference between these two policies. In many cases term life insurance is more affordable, if coverage that lasts only for some period of time (in most cases we are talking about 20 years) is what you are looking for. However, when it comes to senior life insurance, especially if they are close to 80, price between term life and whole life insurance is almost unnoticeable. If you are looking for life insurance with sickness that can make you a high risk in insurers eyes, both of life insurance policies could be expensive.
Keep in mind that your policy should have the perfect coverage that suits your needs, that it should be affordable (there is no point of getting a policy with the premium that you can’t afford to pay every month) and that its protection lasts for as long as you think you need it. Therefore, if you don’t choose the right life insurance policy, even if it is affordable it will make you lose your money and protection in a long run.
Borrowing Some Money from the Policy
Many people want to have an option to borrow the certain amount of money from their life insurance policy, before the actual pay-out that they agreed on. This is the option that only a permanent life insurance policy offers.
Whole life insurance builds cash value with time that you can use in case of emergency, such as helping someone out when it comes to paying for education or covering expensive medical bills etc. It is also known as policyholder’s equity or cash surrender value of life insurance.
However, to be able to use this money in a way that will not affect your policy negatively, you have to know the rules. This cash is built with time, which means that in the beginning we are talking about only a small amount of money. In other words, some time has to pass in order for you to be able to take some money out from the policy. This happens because in first few years, insurer may deduct expenses upon cash surrender.
Therefore, the best advice is to think about the coverage you need before you start to look for a life insurance policy.