If you are planning for an early retirement or securing your life, now is the time to start your life insurance shopping. Remember while looking for quote for life insurance, you will come across different kind of policies with mains as Whole Life Insurance and term Insurance.
Take a wise decision of choosing Whole Term Insurance as your option. A specific amount will be paid to your beneficiaries or nominees upon your death or sudden misshape. The basic difference between these insurances is coverage period. In term insurance you get a set period of 10 / 20 years, while whole life insurance is going to pay you the benefits as long as you pay the premiums.
Once you have decided to buy whole life policy and is it’s issued, you cannot revoke, cancel or reduce it. Policy will only get cancelled, if there is no payment or fraud. This insurance policy will definitely give you a degree of certainty with primary advantages like –
Guaranteed Death Benefit – The guaranteed fixed amount is received by your loved ones.
Cash Value – The amount can be borrowed against the portion of your premium.
Level Premiums – There will be no fluctuation in premium amount.
Finding the quotes for life insurance, choosing and deciding is your personal decision, however, it depends in age, financial budget and coverage goals. Whole life insurance will significantly cost you more than other policies, giving you the same coverage amount. But the guarantee of level premiums and cash value should be your main motive.
Unlike death value, cash value can be used while you are alive and can be borrowed to reduce the premiums or against the premiums. Cash value also accumulates as a tax advantage, giving you the benefit to withdraw the amount that does not exceed taxed amount. Along with this the payment of the policy is dividend by insurers. Taxes are generally gained by dividends.
The cash value can be borrowed from or against the insurer, or can be used by third party as collateral. As well all aware that insurance is ultimately going to benefit someone other than you, hence, cash value is shielded from creditors.
Cash value can be a stable source in financial planning in retirement, helping you to ride out downturns of market and minimize your tax. You may also choose policy payout as lifetime income in form of annuity instead for choosing death benefit.
Not only this, Life insurance’s cash value can also fund your college needs. Married, with college going kids, this policy can be used as cash value in form of policy loan or by surrendering the policy to meet college expense.
Moreover many insurance companies also offers and allows you to buy additional benefit with additional insurance without asking you to go through a tedious health checkups. So, you can buy multiple insurance policies and avail benefit.
As Whole life insurance will pay a death benefit, hence, it allows you to plan for a legacy. You can choose who to give your death benefits from your heirs, charity or organization. Being a flexible asset, it adds value to your financial planning while you are still alive. Beware about utilizing these living benefits might trigger tax, so get an advice from tax advisor or financial professional or expert to understand and determine options for your needs.
The final decision of to buy or not should be in regards to your future health and budget. There is no need to acquire a life insurance, if it will not be useful for you or your loved ones in rainy days.