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Why do people choose higher-cost whole life plans? The answer may surprise you
Whole life insurance allows you to have permanent life insurance protection throughout your life. Term life insurance, on the other hand, is limited to a certain number of years. One of the major benefits of whole life insurance is that you can get coverage while you are younger and lock in lower rates not available to you as you age. Quotes for whole life insurance as a young, healthy individual are much cheaper than premiums as you get older.
Whole life insurance is an investment. If you want your premiums to remain unchanged for years to come and have a permanent solution to your life insurance needs, then whole life insurance may make sense.
This type of insurance also provides a helpful way to develop equity. In some cases, you may even be able to borrow against the value of your policy as well. Your investment will also grow at a fixed interest rate over time.
Individuals who are younger and healthy get the most value out of whole life insurance because they can benefit from low premiums for the rest of their lives. Getting a quote for insurance when you are much older may be significantly more expensive.
One of the major drawbacks of whole life insurance is that it is often more expensive than term insurance. In some situations, it can be six to ten times costlier than term life insurance.
Some people purchase whole life insurance because they want to use it as an investment vehicle. While this is certainly possible with whole life insurance, the interest you receive is often less than what you would get from other investment opportunities. Many policies will only grow at a rate similar to a savings account, but others may have increased return potential as well.
PolicyScout will be able to get you quotes for both types of policies so you can see the potential costs and investment opportunities. If the investment is important to you, then it’s critical to thoroughly explore this issue.
Whole life insurance can be more complicated than term policies, which means it is especially important to have someone review this policy in depth with you. If you terminate the policy early, for example, you may not get the full value or return on investment you had anticipated when you purchased the plan.
Let PolicyScout help you navigate this life insurance option. We can help you not only determine whether whole life insurance will work for you, but we will also gather various quotes so you can fully explore your options and get the best rate possible. Give our team a call to learn more.