Great question! The answer though depends on what you need the insurance to do. If you are looking for something only to cover for a short period of time, then perhaps a term policy would make more sense. If you are looking to create a tax free legacy for your children or spouse, cover for your eventual funeral expenses, or have a policy that you could borrow money from if you needed to, then yes, a whole life policy might be the way to go. If you would like more information on the different types of policies, please contact me, and I'll help you sort it out. Thanks for asking!
As Jim mentioned it really depends on what you want your insurance to do. If you need permanent insurance to solve a permanent need then whole life could be an option.
Whole life can be either participating or non-participating. If you have a participating policy then you participate in the profits of the insurance company. If you have a non-participating policy then you do not share in any profits, but chances are that your initial premium would have been lower. Another type of permanent insurance is Universal Life, which typically allows for more flexibility in premium level and investment options. Each type has its strengths and weaknesses
I recommend that you would with a local insurance broker to find the plan that is right for you at the right price.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.
There are some financial advisors who always recommend Whole Life, and there are others who never recommend it. This can create a bias in life insurance shoppers, so that they may not recognize a very good option (maybe the only option for which they qualify) when it is presented to them.
There are different types of life insurance policies: Term, Universal Life, Indexed Universal Life, Whole Life, and others. Each has a benefit for certain situations. Using a trusted professional to compare your need and your budget, with the benefit and cost of different types of policies, can help you determine whether Whole Life is recommended for you.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
It depends on the need (not a very direct answer I know!) - the reason for this is because everyone has a different purpose for why they're buying life insurance. There's no one shoe fits all policy in this industry. What you need to look at first is what you need the coverage for - it's helpful to discuss this with an independent agent who can walk you through this and help you determine the structure that's going to be most suitable for you.
If you're only interested in buying coverage to cover a certain debt for a limited time, you may want to look at term insurance - in that type of situation, you may just be throwing excess money away. If you're buying coverage for estate planning purposes, you would want to look at permanent coverage because you're planning for the long run and it's not something you want to be cheap about.
With permanent insurance, there's two main types - Whole Life and Universal Life (there are sub-categories with in that - e.g. guaranteed universal life, current assumption universal life, indexed universal life, participating whole life, non-participating whole life, and others). Permanent life insurance is designed to provide coverage for the rest of the insured's life and build cash value. Under a guaranteed universal life (GUL) program, the policy can be structured to keep premiums level and provide coverage up to a specified age (e.g. to age 90, to age 100, or even up to age 121) under the "dial down" process. Whole life features level premiums and death benefits and builds cash value at a faster rate (participating WL policies may pay dividends that can be used to increase the death benefit or decrease the premiums over time - non-participating WL policies do not feature this ability) - the trade off between this and guaranteed universal life is that to increase the cash value faster, the premiums will be substantially higher (can often be 2-3x the premiums of GUL programs on many occassions). Regardless of the permanent coverage type, the carrier takes back the cash value upon the death of the insured, and pays out the death benefit proceeds. Therefore, GUL policies allow you to maximize your death benefit and minimize your premium dollars that you pay for the coverage.
Some agents/brokers/advisors will ALWAYS suggest you buy whole life - others will NEVER suggest buying it. While it's helpful to shop around, getting too many hands in the cookie jar can create a very confusing situation for the client. Each type of coverage has a benefit for certain situations. You need to trust the agent you're working with to compare your needs, premium budget, the benefit level, how long you need it for, and other factors, to help you figure out what's best for you whether that be whole life or another type of coverage.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Whole life is not recommended if you need a high level of protection and have limited resources. If you can afford whole life to meet your protection needs, then it is a very good option because the net cost over a period of time is comparatively low and it provides flexibility to meet future needs. The important issue is to provide adequate protection.
Whole life is recommended for people who care more about life insurance coverage to age 100 with a fixed premium throughout the life of the policy. The rates are usually higher than term life insurance initially but will not increase drastically like term life would as your age increases at the end of the stated term. Whole life insurance builds cash value while term life builds none. The cash value in the whole life insurance builds up in the early stage of the policy and is used to keep the premium level in the later stage of the policy.
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Whole life can be either participating or non-participating. If you have a participating policy then you participate in the profits of the insurance company. If you have a non-participating policy then you do not share in any profits, but chances are that your initial premium would have been lower. Another type of permanent insurance is Universal Life, which typically allows for more flexibility in premium level and investment options. Each type has its strengths and weaknesses
I recommend that you would with a local insurance broker to find the plan that is right for you at the right price.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.
There are different types of life insurance policies: Term, Universal Life, Indexed Universal Life, Whole Life, and others. Each has a benefit for certain situations. Using a trusted professional to compare your need and your budget, with the benefit and cost of different types of policies, can help you determine whether Whole Life is recommended for you.
If you're only interested in buying coverage to cover a certain debt for a limited time, you may want to look at term insurance - in that type of situation, you may just be throwing excess money away. If you're buying coverage for estate planning purposes, you would want to look at permanent coverage because you're planning for the long run and it's not something you want to be cheap about.
With permanent insurance, there's two main types - Whole Life and Universal Life (there are sub-categories with in that - e.g. guaranteed universal life, current assumption universal life, indexed universal life, participating whole life, non-participating whole life, and others). Permanent life insurance is designed to provide coverage for the rest of the insured's life and build cash value. Under a guaranteed universal life (GUL) program, the policy can be structured to keep premiums level and provide coverage up to a specified age (e.g. to age 90, to age 100, or even up to age 121) under the "dial down" process. Whole life features level premiums and death benefits and builds cash value at a faster rate (participating WL policies may pay dividends that can be used to increase the death benefit or decrease the premiums over time - non-participating WL policies do not feature this ability) - the trade off between this and guaranteed universal life is that to increase the cash value faster, the premiums will be substantially higher (can often be 2-3x the premiums of GUL programs on many occassions). Regardless of the permanent coverage type, the carrier takes back the cash value upon the death of the insured, and pays out the death benefit proceeds. Therefore, GUL policies allow you to maximize your death benefit and minimize your premium dollars that you pay for the coverage.
Some agents/brokers/advisors will ALWAYS suggest you buy whole life - others will NEVER suggest buying it. While it's helpful to shop around, getting too many hands in the cookie jar can create a very confusing situation for the client. Each type of coverage has a benefit for certain situations. You need to trust the agent you're working with to compare your needs, premium budget, the benefit level, how long you need it for, and other factors, to help you figure out what's best for you whether that be whole life or another type of coverage.