WHOLE LIFE
Whole life provides a death benefit and an accumulating cash value. It has a fixed level premium every year. An upside to whole life is the guarantees. As long as the premium is paid on time, you are guaranteed the death benefit and a minimal growth on the cash value. These guarantees make whole life policies a safe harbor vehicle to not lose your money. In addition to the guarantees, companies may credit the policy dividends each year that increase the value of the policy even more. Dividends are not guaranteed and are subject to the annual performance of the providing insurance company. For this reason, it is very important to choose a company with a strong dividend crediting history. For example, choose a company that has always paid a dividend each year. In addition, look at the amount of dividends a company anticipated versus the amount that was actually credited. Some companies have performed better than expected for the last 30 years resulting in higher dividend payouts to their policyholders.
Whole life provides a death benefit and an accumulating cash value. It has a fixed level premium every year. An upside to whole life is the guarantees. As long as the premium is paid on time, you are guaranteed the death benefit and a minimal growth on the cash value. These guarantees make whole life policies a safe harbor vehicle to not lose your money. In addition to the guarantees, companies may credit the policy dividends each year that increase the value of the policy even more. Dividends are not guaranteed and are subject to the annual performance of the providing insurance company. For this reason, it is very important to choose a company with a strong dividend crediting history. For example, choose a company that has always paid a dividend each year. In addition, look at the amount of dividends a company anticipated versus the amount that was actually credited. Some companies have performed better than expected for the last 30 years resulting in higher dividend payouts to their policyholders.
Why should I choose a Whole Life policy?
Whole Life policies are a great option for conservative investors due to the guaranteed cash value growth and death benefit. In many cases, the main focus of a Whole Life policy is the cash value which accompanies the death benefit. These types of policies are designed to grow cash value at a slightly slower pace with steady consecutive returns each year while minimizing the risk.
