Whole Life Insurance - Advantages of Whole Life Insurance

Some life cover policies may not suit the needs of most people. They can be expensive and carry high fees and commissions. However, they do have some benefits in specific circumstances. Let us take a closer look at some of the possible advantages of whole life cover.
What is whole life insurance? Whole life cover is also sometimes identified as permanent life or ordinary life cover. Permanent life cover policies normally have two essentials:
1. A mortality charge - the part of your premium that pays for the coverage.
2. An investment component - the part of your premium that earns interest. The part of your premium that pays for the mortality charge increases as you age while the part that goes into the investment decreases. Depending on the insurer's loss, many companies may credit the investment with an annual dividend in addition to the interest earned. If you decide to give up your policy, your cash surrender value can be paid out in cash or paid-up cover.
What are the possible advantages of whole life insurance?
1. An ordinary life cover policy includes an investment part which accumulates a cash value.
2. The income on the cash value of the policy can be withdrawn or borrowed against in the form of a policy loan by the policyholder.
3. A permanent policy can be used as an estate-planning medium. A policyholder can set up an insurance trust which will apply the proceeds of the policy to the estate taxes when the policyholder passes away.
4. The policyholder usually pays a level premium for whole life which normally does not rise as the policyholder ages.
5. The policyholder has lifelong coverage with no future medical exams, unless a change is made to the policy.
6. Whole global cover may be a fine option because of the tax savings.
7. Child life ins. is perfect for planning for the future because of the cash value the plan can accumulate.
8. An ordinary life cover policy may be recommended as a savings medium for people who regularly have income left over after maxing out their other tax-deferred accounts.
9. A permanent life policy may be a better option for older people because term life insurance gets progressively more expensive as you reach 60 years of age.
10. A whole ins. cover policy can earn dividends. Dividends result when the actual life insurance costs turn out to be less than were believed in setting the premiums.
You can talk to your broker to make sure that whole life insurance is the best insurance for you.