Whole Life Insurance Disadvantages

Advantages

Lifetime Policy

As its name proposes, a whole life policy covers or protects the individual for their whole lifetime. Hence, the premiums that have to be paid are guaranteed for the lifetime of the individual and will not increase unlike other policies such as term policies. Since the lifespan of the policy is not limited, the beneficiaries and the family of the insured can be assured that the insured’s coverage will be obtainable later on to survive.

Whole Life Insurance is Guaranteed

Almost all life policies that are sold offers a guarantee. What is guaranteed is the premiums as well as a minimum amount of rate of interest based on the cash value accumulation portion on most policies. In relation to the minimum amount of rate of interest, as better economic situations comes, this rate also increases. However, when the economic times plunges, at least there is a guaranteed a minimal amount of return. Generally, life insurance gets more expensive as the insured ages and the cost of renewing a long time term policy when the person is already middle-aged may be unimaginable. However, with whole life insurance, the insured’s family will have insurance protection for the insured’s entire lifespan.

Whole Life Savings/Investment Feature

Whole life insurance would be extremely beneficial for those who are not

Hence, the larger the policy purchased, the greater the cost. Since term life policies only covers the insured for a limited time and do not feature any investment benefits, the premiums are cheaper in comparison to whole life policies as their premiums can be as much as 10 times higher than term life premiums for the same amount of coverage. Plus, whole life policies tend to have fees and commissions attached by the underwriter due to their high value and open-ended