Whole Life Insurance Online Quote – The Benefits Explained

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Whole Life Insurance Online Quote – The Benefits Explained

There are important differences between Term and Whole Life Insurance, but don’t think that one is bad and the other is good. It depends on the situation. You get more term insurance than whole life per dollar spent, but this is because whole life is more than just insurance against accidental death, it is also an investment. As such you can figure it into your overall investment planning for retirement.

An Investment

How is it that any life insurance can be an investment when the majority of policies will only pay after someone’s death? Let me share a true story which was told to me by my mother. She stated that my father purchased a whole life policy within 2-3 years after they were married. Until then he had only had a Term Life policy through his work which would only cover just a tad bit more than the burial expenses. This new whole life policy would provide my mother which a bit extra to cover the bills if anything should happen to my father.

They were truly bowled over by the Whole Life policy for not only were they able to make some extra money, but also it made their dreams possible. As the years rolled by, there were four children one after the other. While it was their long cherished dream to buy an acreage in the horse country of Central Florida, they did manage to buy a house in the suburbs. Finally, it looked like opportunity was knocking at their door – a parcel of five-acres did come their way, the pricing was right. The only snag was they had to pay $1,000 as down payment, the balance in monthly payments. Mom felt the monthly payments could easily be met, with my dad’s salary we could certainly make the extra monthly payments, but then the only thought plaguing my mind was where would they go for the $1,000?
My mother drove herself nuts trying to think of a way to come up with the thousand dollars. She just couldn’t find a way, until she remembered the whole life insurance policy that they signed up for years ago. She remembered something about the difference between a whole life policy and a term policy that could help her in her time of need.

The ability to borrow funds from the policy is one of the big benefits of it. She was able to phone the insurance company and learn that the policy had grown to having a cash value of more than $1,000 that could be borrowed against.

You Can Borrow From The Policy

Can it make sense to borrow money from your insurance policy? You bet it can. The interest rate will likely be lower than anything you can get anywhere else such as a home equity loan and you won’t be on a schedule to pay it back. You should at least make regular payments on the interest accrued to keep the loan balance from getting larger. The insurance company won’t determine how much you should pay every month. The amount is up to you, so you can’t be penalized for missing a payment. You will want to repay it eventually though, since the idea behind getting life insurance in the first place was to have the cash value available to you or your heirs at some time in the future. The only reason not to pay it back would be if you used the money to make an even better investment, such as buying property that would appreciate in value.

Mom said that little Whole Life insurance policy really saved the day a few other times too when they needed a few hundred dollars suddenly in an emergency. Just like the little Energizer bunny rabbit, it just kept on giving and giving. A Whole Life insurance policy may ‘literally save your life’ some time when you need money and can’t borrow money from the bank for one reason or another.

If you’re searching for Term Life insurance, be sure to get a Whole Life insurance quote, too. You can obtain one over the internet. Look at each policy type various companies offer, matching them with your individual Term Life insurance needs. After all, an educated consumer is a happy consumer.

By: Daniel Wright

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