, what do you get with “whole life” beyond insurance that makes it so much more expensive?

Question

Just wondering (didn't know such a thing was available until recently)

Answer 1

You get a policy that never expires, as long as you keep paying your premium. If you are going to have a need for life insurance at 90, you'll have it, with whole life - you WON'T be able to get it in term.

This is MOST useful for estate planning - if you have a large estate you want to pass down to your kids, avoiding inheritance taxes.

Answer 2

With a whole life policy, the extra cost is that you are also buying 'cash value' in the policy. This cash value is savings feature that you can withdraw or borrow against in the future. In term life insurance you are just paying for the insurance aspect. With Whole life you are paying the 'term rate' plus an amount that builds up cash value in the policy. With Whole Life insurance, the idea is that you will have the policy for your whole life, with a term policy, you have the policy until the end of the term.

I think you can insure just about anything that you want to, I would prefer to insure my life for the period of time that the need was there (i.e. when kids are school age) and then be done with the insurance, and take the extra money that I would pay to a whole life policy and invest it in more lucrative investments.

Answer 3

A traditional whole life policy is designed so that the cash value is equal to the death benefit in the year of maturity. When the policy matures, you get a check for the cash value and your coverage goes away. This type of forced savings plan tends to increase the premiums.

Although there are a few niche uses for whole life, most people do not need or expect cash in their life policies, universal life and term life tend to suit these people much better depending on whether you have a permanent or short term need.

Answer 4

It locks in the rate for the rest of your life. The younger you buy, the less expensive it is. It always costs more than term because when you're young, there's less of a chance that you'll die. When your term is up, your rate increases - where with whole life it never will.
I'd say stick with term. You'll spend less money for the same coverage. It's just the last 10 or 15 years of your life that you might have to pay a little more, versus paying more until the last 10 or 15 years of your life. Make sense?

Answer 5

N O T H I N G! You will never see the cash value. Any money accumulated in your cash value policy is NOT yours, it belongs to the company. If you die, they pay the death benefit and not the cash value. It says it in every policy. With a Cash Value policy you are just paying more a month for the same protection as term. Buy term and Invest the Diff. is the best way to go.

Answer 6

Whole life insurance continues for your entire life. Most people don't need this type of insurance because you end up gaining money over your lifetime and wouldn't need to keep paying for insurance to cover bills and expenses.

Answer 7

Whole life is life insurance plus investments all wrapped up together.

Answer 8

here is a whole lot of info from this encyclopedia webiste.


http://en.wikipedia.org/wiki/Life_insurance

life insurance + investment(no choices) = Wholelife = 1 monthly payment


(life insurance only = TermLife) + (Investment(mutual fund) = Better Return on Investment) = 2 monthly payment(spareted accounts)


http://www.youtube.com/watch?v=yQZ1285SkgY

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