Life Insurance

Whole life insurance is often referred to as a permanent policy. Unlike a term policy (a policy with a fixed expiry date), your whole life insurance continues to cover you as long as you remain up-to-date with the premiums.

You might read the differences between term vs whole life insurance and ask why you might want a policy that doesn’t cover your whole life.

However, term and whole life insurance policies do cater to different people.

People who benefit from term life insurance are those who are young but who don’t necessarily want to go uncovered. Term life insurance is less expensive, and you can match it to meet your needs. For example, if you’re worried about leaving your loved ones behind to face private student loans or a mortgage, you can take out a term life policy that covers those bills (both in terms of the benefit and the term).

Whole life insurance is more expensive, but it does provide you with coverage both today and years or decades down the line. When you have lifetime coverage, your beneficiary will receive a death benefit (as long as your policy is valid). They can use it as an income replacement, to cover final expenses, or however else they see fit.

Some people also use whole life insurance to build equity because once you build up enough cash value in your policy, you can borrow from it. Though, if you don’t pay it back then your death benefit will be smaller. Some insurers also provide benefits like dividends, which rewards you for investing with them.

So while whole life policies are more expensive, they do come with benefits for estate planning that do make them attractive.

Life insurance offers a fairly straightforward promise: it benefits people who will leave behind survivors (partners, spouses, children, other dependents) and who want to ensure that they have some cash – at least for a while.

The policy is beneficial for many people, particularly if you have any long-standing debt that could make life difficult for your survivors.

However, life insurance is usually not worth the premiums if you:

• Don’t have any debts
• Don’t have any dependent beneficiaries
• Don’t earn enough to put money into your policy

The trick with whole life insurance, in particular, is that you get out of it in cash value what you put into it. You don’t pay a monthly premium and automatically get the whole death benefit. You only have access to the full benefit if you pay in over a significant period of time.

Finding the best life insurance and the best life insurance company means first taking a full assessment of your current finances (including debts and assets) and where you want to be in 10 or 20 years.

Your best bet is to shop around for life insurance quotes that not only cover your core interests but also provide affordable premium payments in the meantime.

Unfortunately, there is a catch: buying life insurance when you’re young and healthy means you pay far less in premiums (in terms of the monthly payment). However, there’s less need for this kind of policy when you’re younger.

Like any investment, a life insurance policy works best when it works for you. Whether you choose between term vs whole life insurance or no life insurance at all depends on your age, your dependents, and your finances.

That’s why it’s important to know what kind of life insurance coverage you need before you sign on the dotted line. Otherwise, you’ve added a new monthly bill that doesn’t even work for you!

Are you looking for more ways to save? We can help you find a life insurance policy that suits your needs and your budget.