The requirement for different kinds of insurance has been steadily growing over the years. It’s not only treated as a method for safeguarding your family or future, but also considered a wise investment choice, especially life insurance. The growing market for the life insurance sector is testament to the fact that more people are opting for this every day.
There are a number of reasons for the rising popularity of life insurance as a standard choice for individuals and families. The first and most important one is that a life insurance policy provides some assurance of continued support in case of a person’s death. Especially when that person has a dependant or a family, it is essential for them to be able to continue their lives.
The productivity and income generated by an individual is one of the main factors then, the secondary one being that a life insurance policy offers continued support while the person is still alive. This way it can be treated as an investment or a retirement plan to ensure that there is a nest egg for you when you retire from work.
Types of Life Insurance
There are mainly two kinds of life insurance policies that people choose from:
- Term Life Insurance
- Whole Life Insurance
We are going to take a detailed look at the second kind so that you can understand what is involved. A whole life policy is, as the name suggests, one that offers an insurance cover for the complete lifetime of the individual.
What are the Benefits?
While term insurance normally provides protection and cover for a specified period of time, whole life policy makes sure that the security of a policy covers the complete lifetime of the policy holder. This means that in the case of their death, whenever it occurs, the policyholder can be sure that his or her beneficiaries are provided for.
As a choice of investment, this kind of policy acts as a wealth generation stream, since the revenues or returns keep accumulating and can be withdrawn or reinvested. It’s also possible to take a loan against the accumulated value of the interest or cash value, so it acts as a kind of security for future loans.
The premiums for this kind of insurance policy will need to be paid on a regular basis for the entire lifetime, as the policy will continue no matter what age you are. Since term insurance normally gets renewed after a while, the premiums you pay will be affected by various factors like age, health, medical issues, etc. and you are bound to pay a larger amount after a few years.
On the other hand, with the whole life version, the initial premium that was decided is likely to remain unchanged all your life. This means that the option for you or your beneficiaries to be able to utilize the accumulated cash value or interest is always available, without worrying that the premium will increase at any point!
The author of this article is familiar with the details of Whole Life Insurance and other kinds of insurance policies.