Whole Life Insurance

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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.

With a whole life insurance policy, you will be purchasing not only peace of mind knowing that a death benefit will be provided if something unexpected cuts your life short, but can provide yourself with an investment tool that can be used to your benefit in your old age.

Reasons to Consider Whole Life

• Since you are a bad saver, you want to choose a whole life insurance policy to plan for your financial future and to provide for your heirs
• Your career path has been quite lucrative and planning an estate for your heirs is a goal of yours
• Since your beneficiaries will be inheriting sizable fortunes from you, they will need the death benefit to pay estate taxes on other assets
• Even after your death, you will be responsible for the long-term support of others
• Since you are in top condition and plan on outliving a term life insurance policy, a whole life insurance policy will cover you when you do start to age down the line

Choosing a whole life life insurance policy may seem like an odd decision to make, especially when you feel like your life is just beginning. However, the best time to make difficult and somewhat depressing decisions is when you are at the top of the game.

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