Advantages Of Whole Life Insurance

Is The Additional Cost For Whole Life Worth It?

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Advantages of whole life insurance. Are there any advantages to owning whole life insurance? You put out more money for each $1000 of life insurance than you would put out for a term policy. In other words, you are getting less death benefit for each dollar paid to the life insurance company. Keeping this in mind could there possibly be any advantage to owning whole life insurance? Let us take a look.

• Whole Life Insurance Accumulates Cash Values

The whole intention of life insurance is to provide cash in the event of the death of a breadwinner. If there were no women and children life insurance probably would not exist. We buy life insurance mainly to protect our families.

In today's world people are living longer than they used to. It is a great feeling to know that you protected the family with life insurance but you didn't die while they were completely dependent on you. The children are no longer dependent on you. Your spouse is totally self sufficient. It could possibly be a good thing to cash in that life insurance policy. You check with the life insurance company and find that if you did you would actually get back some money.

Depending on the age of the policy and the performance of the company you could possibly get back more than you put in. This includes your dividends of course. Dividends are not guaranteed. Term life insurance doesn't do that. Wouldn't you agree that this is one of the advantages of whole life insurance.

• Whole Life Insurance Accumulates Dividends

If you buy a whole life insurance policy from a company which effectively keeps down expenses and one which is successful with it's investments you will earn dividends from your policy. These dividends can be paid to you in cash, be left with the company to accumulate interest, be used to reduce premiums or you can purchase paid up additions with them.

Cash

If the policy earns a dividend the prior year the life insurance company will send you a check for that amount.

Accumulate Interest

You earn a dividend but you choose to let the money stay with the company a d accumulate interest. This can amount to a considerable sum over time, especially when added to the cash value of the policy itself. Certainly this is another of the advantages of whole life insurance.

Premium Reduction

You have your life insurance policy a few years. You had chosen, when you bought your policy to use the dividends to reduce premiums. You put pencil to paper just to see how your policy is doing. You had not thought of it before but you now notice that you have been paying much less than you had contracted to pay. What had been happening was that your dividends were used to reduce premiums.

Paid Up Additions

This is awesome! Your policy earns a dividend and it is used to purchase paid up additions. Paid up additions are tiny single premium whole life policies that are added onto the policy you bought. Each year, if the company pays a dividend, you get a paid up whole life policy added to your original. These paid up additions have cash values and also participates in dividends.

Upon your death, depending on when you die, your beneficiaries could be paid considerably more than you anticipated. If you did not die and wanted to cash in your policy, years down the road, you would get more than the contract said you would get. Wouldn't you agree that this is one of the advantages of whole life insurance.

• Whole Life Insurance Pays A Death Benefit

At your death, regardless of how you die, your whole life insurance policy will pay the full face amount of the policy to your beneficiaries. The amount can be paid in one lump sum or in the form of an income. You can decide how payment is made before your death or you can leave it up to your beneficiaries.