When choosing between life insurance products, it is important to note that a whole life insurance policy features more expensive premium payments. In essence, a whole life insurance policy allows for its owners to build savings.
Term life insurance on the other hand has a simpler mission- to provide enough funds to cover for basic death-related expenses such as hospital bills and funeral costs. In short, term life insurance gives policy owners and their beneficiaries a sense of security that their money will not be losing any value as time goes by.
Whole life insurance allows policy owners to borrow money against their policy’s current cash value. This is primarily based on the fact that insurance features a predictable rate of return assessed on a yearly basis. This is most commonly referre to as dividends. Whole life policy owners have full access to the cash value at any time. Some life insurance owners opt for whole life as this gives them a source of funding for major purchases such as enough cash to apply for a car loan, tuition fees, or mortgage to name a few.
Here are other advantages of purchasing whole life insurance:
- Business minded policy owners can use their income to build money through their whole life insurance policy. The accumulation of money in your policy is somewhat similar to building money within your bank account. You will have more spending power given that you pay your premiums religiously to the insurer.
- Whole life insurance offers utmost financial freedom for its policy owners to become entrepreneurs and build businesses without having to save up for capital. Policy owners with enough money in their whole life policies can depend on its financial backup which can then be used in case you need more money to expand and grow your business.