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In recent years, whole life insurance policies haven't been among the most popular types of life insurance to purchase because of their high-cost. However, since the financial crisis, it seems they've been making a comeback.

According to a recent Wall Street Journal article, some people have found refuge in these long-term life insurance policies and the benefits they can offer.

The Cost of Whole Life Policies Have Long Been a Deterrent

The article looked at the recent popularity of the whole life insurance policy and why more people are turning to them rather than the always popular term policy. The term policy comes a lot cheaper than whole insurance because it will only pay out during a specific number of years (ex. 10 year period).

On the other hand, whole life insurance policies give more benefits, including coverage during the span of your life, as well as money set aside for tax-deferred investing so that down the line you will have extra money for retirement or other expenses while still alive.

However, because of these benefits, the whole policy comes at a greater cost and this has been a deterrent for those who simply don't have it to give. But now it seems that many are looking past cost to the long-term benefits this type of policy can provide.

The Investment Power Is Greater With the Whole Life Policy

James Hunt, an actuary interviewed for the Wall Street Journal article, noted that it's hard to make a "term life and bond fund work better than a good whole-life policy." Because the investments of whole life insurance policies are tax-deferred until death, the dividends on investments are often much greater, which is not only good for you if you decide to pull some of your funds out early, but also for your beneficiaries when you pass on.

Of course, there are definite pros and cons of the whole life policy and they should all be considered before diving in. However, if you have the money to invest and are ready to commit for the span of your life (keeping in mind that your payments will significantly reduce over the span of the policy) then you could be giving your family a lot more than memories upon your death.

After working with MetLife in an effort to sell its American Life Insurance Company (ALICO), the two companies were finally able to strike a deal. For $15.5 billion, AIG will be selling its second-largest foreign life insurance business and in turn, own roughly one-fifth of MetLife.

The Specifics of the Agreement

According to both companies, AIG agreed to sell ALICO for $6.8 billion in cash and $8.7 billion in MetLife equity, which includes common stock and convertible preferred securities. Under this deal, the company would take a stake of about 20 percentin MetLife, which would result in 78.2 million common shares and 6.6 million shares of convertible preferred stock.

The shares that AIG holds would come with voting restrictions, however. The company would not be able to influence MetLife's operations and business decisions. But it would be exposed to MetLife's fortunes for up to two-and-a-half years.

AIG Still Trying to Repay Its Debt

Over the past year, AIG has been working hard to repay U.S. taxpayers for the debt incurred after having the government bail it out twice for a total of nearly $200 billion. Ever since receiving the help, which resulted in the company being nearly 80 percent owned by the government, it has made every effort to reduce its debt.

Recently, it sold its Asia unit to Prudential for $35 billion and it has plans to repay its debt via cash generated by its insurance business and asset sales.

Of course, President Barack Obama is placing some life insurance companies on the hook for a tax that will ensure repayment. With this tax, it is estimated that AIG will be required to pay back $388.8 million. With all of the mistakes that the company has made over the last year, it looks probable that the company is indeed picking up the pieces and moving forward in the right way that will not affect customer life insurance rates.

Photo by SpreePIX - Berlin

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