The short answer is it depends. Whole life insurance has it's place in a persons financial plan as do the other types of life policies. Whole life insurance is designed to last your "whole life" as a death benefit to loved ones at a level premium. However, because of the cash value it accumulates it is known as the Swiss Army knife of life insurance. The funds can be used for retirement savings, college funds or cash during a critical illness. Whole life gets criticized because it's premiums are more expensive than it's term life counter parts. Depending on your personal situation you may want to consider both whole and term for your protection. I am always glad to help.
Renwanz Insurance & Financial Solutions, Carlsbad, CA
The answer to any financial question should always be prefaced by "it depends on the need of the individual". That said, there are significant benefits for someone who owns a whole life participating policy.
Whole life, a form of permanent life insurance, features guaranteed premiums, death benefits and cash value. Whole life policies also give you the potential to receive dividends which can increase the value of the policy or provide an increased death benefit for beneficiaries.
Unlike term, the death benefit will last your entire lifetime and the monthly premium will be locked in at the date of policy inception according to your "rating". So, if you are 35 and get rated "Preferred Non-tobacco" that will give you a monthly premium that will not change for your entire life, regardless of any health issues - as long as your premiums are current.
The second important value of whole life insurance is the accumulation of cash inside the policy on a tax-deferred basis. Over time, the cash value increases can be significant and you can borrow cash from your policy at a favorable interest rate. Many people have used this as a source for college funding or even a retirement income stream later in life. These policy loans are generally tax free. There is a lot more to Whole Life policies that can be addressed when considering your personal situation and I would recommend contacting an independent insurance agent that can review your particular needs and situation.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
After you have determined the amount of coverage you need to leave those you love in a good state when you die, you should at least investigate the possibility of purchasing whole life insurance to cover the entire need. If the premium is more than you can handle, mix the whole life with a term rider or another term policy to provide adequate coverage but maintain as much permanent coverage as possible. In the long run, the whole life coverage will provide flexibility that can be extremely important later in your life.
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Whole life, a form of permanent life insurance, features guaranteed premiums, death benefits and cash value. Whole life policies also give you the potential to receive dividends which can increase the value of the policy or provide an increased death benefit for beneficiaries.
Unlike term, the death benefit will last your entire lifetime and the monthly premium will be locked in at the date of policy inception according to your "rating". So, if you are 35 and get rated "Preferred Non-tobacco" that will give you a monthly premium that will not change for your entire life, regardless of any health issues - as long as your premiums are current.
The second important value of whole life insurance is the accumulation of cash inside the policy on a tax-deferred basis. Over time, the cash value increases can be significant and you can borrow cash from your policy at a favorable interest rate. Many people have used this as a source for college funding or even a retirement income stream later in life. These policy loans are generally tax free. There is a lot more to Whole Life policies that can be addressed when considering your personal situation and I would recommend contacting an independent insurance agent that can review your particular needs and situation.