There are a huge number of ways to set up a life insurance policy, and one of the most popular is called whole life insurance (sometimes called ordinary life insurance). This is a policy that is guaranteed to protect the insured individual for the entirety of their lifetime, and it has a multitude of benefits. If you're looking to learn more, keep reading below to discover just some of the advantages whole life insurance has to offer.
There's nothing wrong with saving money in an IRA or 401(k) account, but depending on those funds for life insurance is a big mistake. One big reason for this is that you're almost certain to be heavily taxed or penalized if you take money out before a set time or number of years. Contrast this with a whole life insurance policy, in which you can withdraw your money at any time and for any reason. This flexibility is a huge plus, especially if you have to deal with a financial emergency on short notice.
Did you know that you can actually make money on your whole life insurance? Though not all insurance carriers pay dividends, many of the older and more reputable ones do. This means that at the end of every year, you can expect a dividend (the amount will vary) to be deposited into your account. Best of all, this dividend isn't taxable. If you're looking to maximize the value of your investment, you could do much worse than a whole life insurance policy.
One common theme you may find with other types of life insurance policies is that your premium is adjustable, and will fluctuate over the years. On the other hand, with a whole life insurance plan, you'll never see a difference in what you're charged for a premium. This regularity keeps you from being surprised and having to re-evaluate your budget based on skyrocketing premiums.
The primary reason most people get a life insurance plan in the first place is because they want to make sure that their loved ones are taken care of after they pass away. With a whole life insurance policy, this is never an issue -- the amount that your beneficiaries receive is guaranteed by the plan and won't change after you're gone. This offers many people peace of mind and is one of the main benefits of whole life insurance.