If you're starting out in a career where you have a lot to earn, it's cheaper and more affordable to buy your entire lifetime when you're young.
If you are a business owner and need to give liquid assets to your family members or company.
Premiums are determined by your health and age when you purchase the policy. They tend to be lower for those who are younger. The policy is yours until you cancel it. It's a great deal to lock in rates as a young person. This can help you save money in the long-term. You decide which payment option suits you best.
While it is more complicated than traditional term life insurance, whole life insurance functions more easily than other types permanent life insurance. The premiums stay the same for as long you live and your cash value account grows at the fixed rate. Unless you borrow large amounts of cash value, the death benefit remains guaranteed. If you borrow against your policy you don't have any obligation to repay the loans. However, your insurer may subtract any outstanding loans you owe from the final death benefit you pay to your beneficiaries.
A majority of whole-life insurance policies are "participating" policies. You may be eligible for dividends based in part on the company's financial performance. There are several ways you can use your dividends.
If you own a company and want to transfer liquid assets to your family.
The accumulated cash value of whole life insurance can be used to pay for other expenses, such as those mentioned above, or for supplemental retirement income.2 Whole life insurance is not an investment. However, it can diversify your portfolio and offer additional security for you and for your family.
While term life insurance is generally more affordable than whole life, it's still a good option for people who have high net worth or long financial responsibilities.
A whole life insurance policy can be used to provide financial support for your loved ones and charitable organizations.
The whole-life insurance dividend is another option. The company's performance in the past year may determine whether this annual payment is given to policyholders. While dividends cannot be guaranteed, they can be used if you do receive one.
You can provide for your family after your death by purchasing whole-life insurance. A portion of your premium is set aside for cash value growth, much like building equity in your house.
Your financial protection needs change with the passage of time. It would be a smart idea to look into whole-life insurance if you can relate to any one of these items.