Should You Opt For Whole Life Insurance?

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Since the annual premiums payable with the whole life policy are high, often costing about 10 times that of term policies, it is important to consider the other available options carefully.

Fortunately, by comparing different whole life insurance quotes you can find a plan that has been priced competitively. If you have dependants, including a spouse, children and parent(s) who could suffer financially in the event of your untimely death, then a whole life policy is a good idea.

If you do not have dependants, but you are interested in supporting a cause that you approve, a whole life policy has the ability to channel significant cash benefits to the preferred charity of choice.

Financial support

The main reason why you should consider buying a whole life policy is to ensure your loved ones receive financial support, in the event of your untimely death. This will go a long way in ensuring the lifestyle of your dependants is maintained.

A good policy will ensure some of your goals are achieved, such as paying off your mortgage or sending your children/grandchildren to college, even if you will not be around.

For some people, a 30-year plan policy can help them reach their goals, but for many a permanent, lifelong policy is a better option.

Guaranteed payout

If you are interested in leaving one or several beneficiaries some cash payout, regardless when you die, a whole life policy makes a lot of senses. This is particularly important if you have a disabled relative who is not in a position to earn an income or a family member who requires long-term, ongoing care.

However, the plan may be somewhat expensive to younger people. The costs associated with the plan include upfront fees as well as commissions which go to reduce the annual return on investment, when compared with the prevailing market returns.

Therefore, it is advisable to compare different whole life insurance quotes to know what you are getting yourself into.

Estate planning strategy

In addition to long-term financial security, a whole life plan offers an attractive estate planning strategy for your dependants. Your survivors will get an ideal opportunity to pay the estate taxes using the death benefits. Therefore, they will not have to sell off your valuable assets to the government.

If you stop submitting your premiums you can receive all or a portion of the cash value. To know how the government treats the cash values, dividends and death benefits attributable to the whole life policy contact a tax adviser.

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