Benefits and Advantages of Whole Life Insurance

Whole life insurance (also known as Permanent life insurance) offers a combined death benefit and a cash value plan that runs the course of the insureds lifetime. Once the insurance is in place it cannot be canceled at a later date as long as the annual premiums are paid in a timely manner.

Premiums are fixed for the life of the policy and one of the advantages to taking out a whole life insurance plan. And the younger the insured is when the insurance is purchased, the more affordable the annual premium will be.

Another aspect to these whole life policies is the built-in savings plan. A percentage of premiums paid for this life insurance is entered in a cash balance or savings program. That account is able to earn a fixed interest rate. In time as the balance increase it can be used in several different ways, such as to use the funds to cover the cost of the annual premium, to purchase extra insurance, or to borrow against the balance. It's also possible for the policy holder to cash-in or surrender the insurance plan.

Variable universal life and universal life are both variants of the standard whole life insurance plans. The basic structure of the insurance is essentially the same, with the exception that additional flexibility and enhanced investment choices are available. Such enhancements include the ability to invest a portion of the cash balance in a variable universal life plan into mutual funds and stocks.

The whole life insurance plans are the more traditional forms of life insurance. It's often recommended for someone that's able to meet the higher premium, prefers a premium that's fixed, or wishes to have peace of mind in knowing that lifetime coverage is in place. It can also be a benefit to those that aren't disciplined savers, as it helps to build a savings plan, and while still giving that safety net for the entire family.

Talking to a professional can help to understand the advantages of whole life insurance policies and to be able to make the right choice to suit the individual circumstances.