Roughly categorized as a pre-need investment, life insurance falls into two categories - the whole life and the term insurance. What?s the difference between the two? Here are the key points.
If you want to continue paying the premiums of your plan, then you will have a whole life insurance policy that will cover for the lifetime. This type of insurance will let you avail all the benefits until you reach the age of 100 because it will earn cash value that starts in the first year of paying your premiums. The good thing of having this type of insurance is that instead of paying an increasing fee, you will just be paying the same amount for the rest of your life while in the term insurance, your premiums will increase every time you renew your policy. Aside from that, the whole life insurance will guarantee you a cash value, but both types of insurance should be paid continuously in order to avail their benefits.
You are able to build cash value with whole life insurance on a tax-deferred basis. Depending on your age when you purchase whole life, this can be a very good long-term investment. It not only gives you lifetime protection without ever having a premium increase but is also an enforced savings program. Of course the policy holder has the right to discontinue the whole life policy and receive the cash value at any time.
Other life insurances can earn higher cash values more than the guaranteed amount which depends on the how much they get from the market interest rates. The performance of the insurance company will also affect the cash value of those who avail the whole life insurance policy, but this type of insurance policy differs from other life policies because other insurances cannot guarantee a cash value.
As a policy holder of whole life insurance, the insured individual could also avail of a loan against his share of premiums in the company. Instead of borrowing money from other sources, the policy holder could apply for a loan in the amount commensurate to his contribution of the life premiums.
Another striking feature of the whole life insurance is the benefit of enjoying dividends. Usually, dividends are given annually to the different policy holders. The dividend is taken from the overall return of investments in a particular year; hence, there are greater returns under this investment scheme.
Preparing a budget for the whole life insurance coverage is a good choice and you should do it now while you can still afford it. A fixed death benefit is also included in this insurance and it is to your advantage. So, what are you waiting for? Call your insurance agents now and have a fulfilling life. - 29969
If you want to continue paying the premiums of your plan, then you will have a whole life insurance policy that will cover for the lifetime. This type of insurance will let you avail all the benefits until you reach the age of 100 because it will earn cash value that starts in the first year of paying your premiums. The good thing of having this type of insurance is that instead of paying an increasing fee, you will just be paying the same amount for the rest of your life while in the term insurance, your premiums will increase every time you renew your policy. Aside from that, the whole life insurance will guarantee you a cash value, but both types of insurance should be paid continuously in order to avail their benefits.
You are able to build cash value with whole life insurance on a tax-deferred basis. Depending on your age when you purchase whole life, this can be a very good long-term investment. It not only gives you lifetime protection without ever having a premium increase but is also an enforced savings program. Of course the policy holder has the right to discontinue the whole life policy and receive the cash value at any time.
Other life insurances can earn higher cash values more than the guaranteed amount which depends on the how much they get from the market interest rates. The performance of the insurance company will also affect the cash value of those who avail the whole life insurance policy, but this type of insurance policy differs from other life policies because other insurances cannot guarantee a cash value.
As a policy holder of whole life insurance, the insured individual could also avail of a loan against his share of premiums in the company. Instead of borrowing money from other sources, the policy holder could apply for a loan in the amount commensurate to his contribution of the life premiums.
Another striking feature of the whole life insurance is the benefit of enjoying dividends. Usually, dividends are given annually to the different policy holders. The dividend is taken from the overall return of investments in a particular year; hence, there are greater returns under this investment scheme.
Preparing a budget for the whole life insurance coverage is a good choice and you should do it now while you can still afford it. A fixed death benefit is also included in this insurance and it is to your advantage. So, what are you waiting for? Call your insurance agents now and have a fulfilling life. - 29969
About the Author:
Graham McKenzie is the content syndication coordinator a leading South African Life Insurance and Life Cover portal. For more information on the different types of life insurance visit our website.
