Topic: What is whole life insurance?

What are the benefits of choosing a whole life insurance policy over other types of life insurance policies? Should I purchase a whole life policy for an investment?

This message was edited 1 time. Last update was at 27/10/2009 10:44:59

WHOLE LIFE POLICY INTEND TO GIVE U LIFE INSURANCE BENEFIT FOR LONGER PERIOD ,PLANS AVAILABLE IN ULIP AND ENDOWMENT...

A whole life insurance policy is type of policy in which your entire or whole life is covered. This is not like any other type of term plan, which is for a specific period of time.Your death benefit and premium in most cases will remain the same.Whole Life provides a guaranteed premium, a guaranteed death benefit, and a guaranteed cash value.

This is life insurance that remains in force during the lifetime of the insured, provided premiums are paid as specified in the policy. While a Whole Life policy is in force you may take out a policy loan against the cash value or receive the cash value (less any policy loans and accumulated interest) should you need to surrender the policy. In addition, a Whole Life policy can pay dividends, which may be used to enhance both the death benefit and the cash value or may be used to reduce your premium payment. Dividends are not guaranteed and policy loans accrue interest and reduce the death benefit.

Unlike term life insurance, a portion of your premium money goes toward your cash value which in turn could pay off your entire policy only after a few years. Also, your premium will remain constant during the time you are covered unless you choose otherwise. And, unless you make a change to your whole life insurance policy, you have lifelong coverage with no future medical exams. Whole life is also a good choice because of the tax savings.

The rate of return on a whole life insurance policy is very low compared to other investments, even with the tax savings factored in. Most investment professionals would agree that life insurance should not be used solely as an investment tool and you should judge your policy choices on the protection and not the rate of return. But, if you are in need of life insurance, the tax benefits and cash value is an added bonus when purchasing protection for your loved one.

whole life insurance is a life insurance policy that remains in force for the insured's whole life and requires (in most cases) premiums to be paid every year into the policy.
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