Topic: Whole life insurance advantages and disadvantages

This message was edited 1 time. Last update was at 02/06/2009 12:53:29

please explain in detail

There are many different advantages to choosing a whole life insurance policy over other types of life insurance. Typically, your premium remains constant, and unless you make changes to the policy, you will have lifelong, permanent coverage without being subjected to periodic medical exams. And, unlike term life insurance, this type of coverage allows you to accrue additional money based on your investments. These investments may come in handy later in life if you need to borrow against your policy.

Some disadvantages of whole life insurance policies include a low to moderate investment return and high fees and commissions. Borrowing against your policy may also lower the total payout that is given to your beneficiaries. Before purchasing a whole life insurance policy, it is a good idea to contact an expert to determine what the average rate of investment may be. The policies are often more expensive than term life insurance policies. If you plan to spend the extra, you need to make sure that it is worth the investment.

Whole life policies are generally more expensive than term life. So, if you need coverage with the lowest possible payments, whole life may not always be your best choice.

You must also note that calculating yield on such policies is not easy. Since your insurance cover goes on for lifetime (while premium may be paid for limited period only), it is mathematically not possible to calculate yield.

Same is case with Jeevan Anand. Nonetheless, Anand is a fantastic policy.

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