The Basics of Whole Life Policies
Many experts consider whole life policies to be hybrid products because they also act as investment vehicles. From the moment that you begin paying into the policy, some of the premiums will go to an investment account. The style of investing that is carried out is determined by the policyholder and the insurance provider. Some individuals prefer aggressive investments while others would like gradual and sustained growth.
Whole life policies will never expire as long as you continue to pay your premiums. This allows you to better prepare your finances years in advance because you know exactly how much you must pay every month, quarter, or year. While the policy will accrue a cash value, you will have a minimum amount of guaranteed coverage no matter what happens to the investments.
Determining the Amount of Coverage
Your total coverage is determined by many different factors. When you sit down with your insurance agent, you will need to discuss a wide variety of variables ranging from your age and health to your financial stability and the age of your family members. Those who have more family members financially dependent on them generally need slightly larger policies.
Who Is a Good Candidate for a Whole Life Policy?
There are a few different reasons why many people chose whole life policies over term policies. One of the biggest benefits is the peace of mind knowing that your family will be protected no matter what the future has in store. Also, because your policy will accumulate interest, you will also be able to develop a nest egg that you can borrow against in the future.