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There are different options when you are interested of applying for a life insurance. If you don’t like to get the policies wherein you need to predict or estimate the time of your death, you can always consider a whole life insurance.

At the present time, people are becoming smarter in terms of buying policies in leaving make themselves and their families insured. If you are one of those people, it is best for you to know what this type of insurance is about. Take the time to consider its pros and cons.

What is Whole Life Insurance?

Experts would often say that this is a permanent plan that offers them with a lifetime protection and a corresponding cash value. A particular part of the premiums you pay will serve as an investment to earn interest. This will accumulate through the cash value of the plan. The total cash value will be tax deferred and will be withdrawn prior to the policy’s termination date.

When the policyholder or the insured surrenders or dies, the entire cash value will be given back. If the person is alive, the cash value will be counted on based on the maturity as the policy’s face value. If you still stay alive or die, you will be guaranteed with a payout to be given to you or to your family. And thus, this often leads to a win-win situation.

Since you are protected throughout the years, you will be required to pay for the Level Premiums. These do not actually change throughout the duration of the policy. These must be paid on a regular basis for you to avoid lapses with the policy.

Pros

The following are the main advantages of this insurance plan:

  • You get protected all your life. From the very first day of purchasing the insurance until the day that you die, you will surely be protected. This is true if you are able to pay premiums regularly.
  • It can turn into savings since the cash value is tax exempted. This is one of the main advantages of this insurance because you can get the entire cash value in case you want to stop paying for the premiums. The cash value increases if it is not withdrawn prior to the termination date.
  • Level premiums do not change throughout the life of the policy.
  • Cancellation is easy. Regardless of your reasons, you can cancel your policy at the soonest possible time. You can also get your cash back.

Cons

Although there are a lot of advantages, there are still some disadvantages that you must consider:

  • Coverage is associated with high costs. Since your entire lifetime is being covered, the premium rates are expected to be very high. Most of the time, the cost will turn as an affordability issue for families. This results for others to do the switching by getting the term insurance.
  • Being an investment tool. Unlike other alternatives in the market, choosing to invest on insurance provides a lower cash value.

With all of these things in mind, you will completely understand the perks and disadvantages of this insurance policy. If you find this option to be more advantageous, you can actually pay for the premiums on a consistent basis. This may also serve as the best option for you.

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