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Whole life insurance is great for almost anyone because it is so flexible and can have more than one use. No matter if you are young, old, have a family to take care of, or have no dependents at all, you can still benefit from having a whole life insurance policy.
The uses of a whole life insurance policy include:
- Can be used to help your beneficiaries when you die
- Can be cashed in later in life if you decide you no longer need it
- You can take out a loan against the cash value of the policy
- You can recoup some of your loses if you ever default on the payments
- You can use such a policy as a tax-deferred investment for your family's future
- Can protect you in the future by selling it to get money for medical or nursing home expenses
The possibility of future nursing home expenses may be something to look at when you take out a life insurance policy. Although your current need may be to protect your dependents if you die, a whole life insurance policy can also be used to pay for nursing home expenses that your family may incur once you are older. Most whole life insurance companies will allow you to settle for a portion of the premiums that you have paid in over the years and those funds can be used to pay other costly expenses. This is another way to protect your children even after they are all grown up.
Whole life insurance policies will allow you to cash in your policy (if it is still in good standing) for a settled amount, based on your pre-established whole life insurance quotes, if you decide you no longer want or need the policy. This means that all of those whole life insurance premiums that you have paid over the years will not go entirely to waste.
Although you may not receive the entire amount that you paid in, you will still receive a portion of your premium payments back. The actual amount will depend on the terms set by your whole life insurance company.
Furthermore, there are also companies that will buy your whole life insurance policy from you, make themselves the beneficiary, continue to make the premiums, and hold on to it until after you pass. These companies will often pay more than you would get back from your whole life insurance company, but they may have restrictions about buying from persons under a certain age.
Whole life insurance policies can provide several advantages over term life insurance policies. These include:
- A cash build-up that can be borrowed against at a cheaper rate than a traditional short-term loan.
– A cash build-up that can be settled and given back to you.
– Secure a policy while you are young to have cheaper premiums when you are older.
– Can be paid to your beneficiaries if you die or settled and used to pay for nursing home or medical expenses later.
Unlike some term life insurance policies which will terminate your contract if you default on payments and keep your money, with a whole life insurance policy you may be able to get back a portion of the premiums that you have paid if you default on the payments and lose the policy.
Although the amount you can receive may be minimal to what you have paid over the years, this will help you minimize your losses on a defaulted whole life insurance policy and help you get back on your feet during this time of financial hardship.
Joint whole life insurance policies are a great solution for those who want to have life insurance coverage for whoever dies first, with both policies paid out to the survivor at your agreed upon whole life quote. With joint whole life insurance, you are both financially covered no matter who may pass away first and you won't have to worry about what will happen with the money on the second policy if you have no other beneficiaries. As an added bonus, this joint whole life insurance coverage should not cost any more than two separate policies, but this stipulation may vary by company.
One of the best advantages of whole life insurance is that, the earlier you get your insurance, the cheaper your whole life insurance rates will be when you are older. This is because whole life insurance rates usually stay consistent throughout your whole life. So, by purchasing a life insurance policy at a young age, you will continue to pay the same affordable rate that as you get older.
Although you may be considering a whole life insurance policy to protect your love ones if you die, it can also be used as an investment in the future. While some investment plans are subject to taxes while the money is building up, the money invested in a whole life insurance policy is not. This can save you some money compared to other investment options.
How it works is that part of your premium payment is invested, while the other part is put towards your death benefit (what your beneficiaries receive if you die). You can potentially lose the money in the investment portion of your account, but your death benefit will remain in place. Most policies will allow you to determine which part is applied towards investing and while part is applied to your death benefit. You can receive the money from your investment portion or borrow against it at any time. What investment opportunities you can take advantage of and other stipulations will vary by company.
Although most people purchase whole life insurance to help protect their beneficiaries when they die, it can also provide you with a way to protect yourself and your family while you are still living. A whole life insurance policy can help you pay for needed medical expenses if you are ever diagnosed with a costly illness. You can settle with your whole life insurance company for a certain portion of your premium payments and then use the money you receive to pay for your medical expenses. This can be an affordable alternative to racking up debt that your family will have to pay off or taking out high-interest loans to get the treatment you need.
If you have a whole life insurance policy and need a loan, you may be able to borrow against your coverage without losing your policy. You will have to pay the money back to keep your policy, but it may be much cheaper and have more flexible terms than a high-interest short-term loan. To determine your whole life insurance quote amout if you want to take a loan, consult with your broker. You will usually be limited by the cash value of your policy (not your coverage amount, but the amount you would receive if you were to “sell” your policy back to the insurance company) and should contact your whole life insurance representative to determine the exact amount, as well as any stipulations on your policy.