Articles
Newsletter
| Life Insurance: Whole Life Vs. Term Life |
 |
 |
 |
| Written by Susan Reynolds |
| Friday, 02 October 2009 08:41 |
|
Life insurance is an important thing to have, and one that can provide you with much peace of mind. You can feel more relaxed about the future if you know that your loved ones will be protected in case anything happens to you. But, you might not know where to begin shopping for a life insurance policy. In fact, you might not know anything about life insurance at all. The basics come down to this: there are two types of life insurance, whole and term, the difference between the two being that term policies are only for life coverage. In addition to providing coverage for a lifetime (or until the policyholder reaches 100), whole life insurance also builds up cash value over time. Coverage remains in effect for the policyholder as long as premiums continue to be paid. Certain benefits are available to whole life insurance policyholders including fixed premiums over the life of the policyholder versus increasing premiums resulting from term life insurance policies. In addition, whole life insurance carries a guaranteed cash value. However, policyholders must maintain current premiums for both whole life and term life insurance to obtain the respective benefits. Given the steady, predictable payments and payout, whole life is an excellent option for most people thinking about the long term future. Besides being more or less permanent, it also enables you to build up cash value free of taxation. If you decide you don't like your policy after all, there's no worries. You can cancel it at any time, and get the value of the insurance in cash. With certain whole-life insurance policies, there is the possibility of gaining more cash value than what the company guarantees that you will receive. You are able to get loans to borrow from this amount. However, the guaranteed cash value depends on the life insurance market as a whole as well as your own interest rates. The company's future financial ups and downs may also affect the amount of guaranteed cash value. However, variable life insurance policies lack a guarantee at all, making whole-life policies generally safer. Advocates of whole-life policies suggest that you insure that your rates can compete well with your other investments. Whole-life insurance policies offer more security than term policies, due to fixed premiums and a guaranteed value. There is also the ability for you to earn dividends, added to your policy based on your insurance company's market performance and profits. Whole-life policy interest rates are usually adjusted annually as opposed to monthly (as with term policies) and there are many policy options offered, allowing you to choose one that bests suits your needs. Whole life insurance is more expensive than term life insurance because it is offering coverage for a life-time with attractive features such as flat premiums and guaranteed cash values. Purchasing whole life insurance should be carefully considered and you should be sure you can afford it over time. If you decide you cannot afford coverage, at least buy term life insurance. About the Author: Susan Reynolds is the webmaster for a leading South African Life Insurance provider. For more information visit: http://life.insurance123.co.za/ Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
Stumble It!
Members : 1254
Content : 2297
Web Links : 1
Content View Hits : 310236
Content : 2297
Web Links : 1
Content View Hits : 310236