| Term life insurance is generally the cheapest | | | | If you're not restricted to purchasing only |
| form of life insurance, but it's not the only | | | | the cheapest life insurance, whole life is an |
| option. Unlike term coverage, in which only | | | | option worth considering. Universal life |
| the face value is paid out upon your death, a | | | | insurance, which is a variation of whole life |
| whole life policy accrues a cash value. | | | | insurance, gives you more flexibility in your |
| | | | premium, the term and death benefits, but |
| In order for the cash value to increase, | | | | this flexibility does come with increased |
| money over and above that which is necessary | | | | risks. |
| to cover the premium must be collected. | | | | |
| Because of this, whole life insurance rarely | | | | However, since universal life insurance |
| will be the cheaper of the two. | | | | premiums are flexible, it sometimes is the |
| | | | cheaper of the two. |
| With a whole life insurance policy, a portion | | | | |
| of the premium you pay will be used to invest | | | | The potential disadvantages |
| in mutual funds, stocks, bonds or other type | | | | |
| of interest bearing investment. | | | | Whole life insurance does have its downsides. |
| | | | One is that it's not possible to guarantee a |
| Even though whole life is not as cheap as | | | | rate of return on your investment so it may |
| term life insurance, such a policy can make | | | | not pay the dividends you expect. Another |
| sense if it's managed properly. | | | | fact worth noting is that a whole life policy |
| | | | probably won't have a cash value until a |
| Benefits of Whole Life Insurance | | | | minimum of 3 or even 5 years so if you |
| | | | surrender the policy during this time, expect |
| One of its best benefits is that it will | | | | it to be costly. |
| cover a person for his or her whole life. | | | | |
| Once the policy is purchased, it will never | | | | The debate rages on as to whether it makes |
| have to be renewed. It will remain in effect | | | | sense for anybody, regardless of age, gender |
| until you die provided you do not allow it to | | | | or marital status, to purchase anything other |
| lapse or be compromised in some other way. In | | | | than the cheapest term life insurance policy. |
| addition, the amount you pay for the premium | | | | |
| will never change which makes it easier when | | | | Some critics believe that if you took the |
| you're trying to budget. | | | | extra money you'd pay in premiums and instead |
| | | | deposited it into a savings account or other |
| Another benefit is that you have access to | | | | low-risk interest bearing account, you'd |
| the cash value the policy accrues. You can | | | | accrue more savings. True or not, whole life |
| borrow against the cash value just as you | | | | is an option many people do take advantage |
| would another type of loan. No one has to | | | | of. |
| approve a loan made against your whole life | | | | |
| insurance cash value. You are the one who | | | | And while it may not be the cheapest form of |
| gets to decide how you'll use the money. | | | | life insurance, it does seem to meet the |
| | | | needs of those who purchase it. |