Whole Life Insurance Policies – What Are They And Do They Suit You?
Dean Shainin

There are basically two kinds of life insurance: Term life and whole life insurance.  If you are thinking about taking out a whole life insurance policy, you should make sure you have a sound understanding of what it is you are paying for.

Just as the name suggests, term life covers you for a set term and whole life is designed to cover you for your whole life.  When you choose this type of policy there is also a savings set aside for you which compounds in interest over time.  Since your premium goes up as you get older, less of it will be allocated for savings, so it is best to begin a policy like this while you are younger to get ahead.  These whole life insurance policies would pay out a cash value if you closed the policy for any reason, and you could use the money for retirement or emergencies.

With a whole life insurance policy your premium in fixed for the term of the policy as is the death pay out figure.  The cash value portion of the policy will fluctuate as it is deposited in the company’s investment banking accounts.  Some whole life insurance policies will give you an option of choosing standard safe investments with lower returns or higher risk investments with possible higher returns.  Most companies will only have the one way they invest the money which is low risk with guaranteed minimal returns. 

You would want to have your whole life insurance policy for over ten years before you consider cashing it in.  It is only a small savings plan but the interest is compounded so the longer you leave it the better your pay out will be.  Be very sure what you re doing if you are thinking of changing early on in the policy as you won’t have much cash value accrued.  Some companies will also charge big cancellation fees which could potentially take up any cash payout you may have due to you.
 
In a nutshell, when looking for a whole life insurance policy, know what you need and read their policy to see if they can provide that for you.  Check out the policy commissions and charges, the cash value details, dividend and interest payments, is there an amendable death benefit, can you change the cover when you pay, and what are the interest rates currently on.

If you are taking your policy out through an agent or broker, put your questions to them to find answers for you, it’s their job.  Find out their opinion or advice on how much whole life insurance policy cover you need, should you have term or cash value life insurance, are there any ways you can receive discounts, and what is the insurer’s rate from Standard and Poor’s.

When you get a quote for a life insurance policy, don’t just get one.  Some sites will give multiple quotes from different companies from filling in one form.  Always be completely truthful when listing any pre-existing conditions as dishonesty could lead to a non payment on a claim.

Dean Shainin is a well known writer of http://www.MyWisdomBase.com a directory designed to provide current information, resources, tips, services and state of the art products.