Whole Life Insurance

By: Rick Bouffard
When people begin their search for life insurance, they are bewildered at all the different types of policies that are available to them. They may be surprised, as well as confused by all of the insurance jargon that describes all of the different policies. Since many people have different needs when it comes to life insurance, it is wise that those in the market for a policy do a bit of research to determine what kind of life insurance is best for them. It is important to make sure that the life insurance policy will work for their particular situation.

With regards to whole life insurance, there are three different categories that this life insurance can fall into:

· Traditional whole life insurance- this type of life insurance will pay a death benefit to the named beneficiary to cover expenses such as funeral and burial costs, credit card debt, mortgage payments as well as unpaid medical bills.

· Universal whole life insurance- this type of life insurance offers am adjustable premium, and once enough cash value is accumulated, has provisions that allow the payments to be stopped and resumed at the policy holders leisure.

· Variable whole life insurance- this type of life insurance policy offers a net investment return, but also offers no guarantee of cash value.

In essence, whole life insurance offers a policy with a level premium and a cash value buildup that does not ever have to be converted or renewed. It basically works as a forced savings account. Once the cash value meets or exceeds the death benefit, you will be able to borrow a portion of this money for whatever need may arise. There are numerous advantages to whole life insurance which include:

· Premiums stay level and are payable for life.

· Dividends are a possibility, but are not always guaranteed.

· Cash values are guaranteed.

Whole life insurance is good for the individual with long-term goals. Consider that this type of life insurance has what is called a “termination date.” This termination date would normally be the policyholders 100th birthday. So, if the policyholder lives to be 100 years of age, they would receive the cash value of the policy once they turn 100. On the other hand, if the policyholder dies before they reach this age, the face amount of the policy would be paid to the beneficiary.

The best way to learn if whole life insurance is worth the risk of tying up funds is to consult a financial advisor, as well as a reputable insurance agent. Both of these individuals know the specifics regarding life insurance and savings plan, and will be able to determine what needs can be met with a particular kind of life insurance.


Rick Bouffard is an insurance industry advisor and technologist who helped create one of the life insurance industry's first ELearning Centers at EFinancial.com. The EFinancial Learning Center contains hundreds of helpful articles and calculators to educate today's insurance shopper and help them make the best decisions for the financial health and future of their family.

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