Copyright 2010 -2013
Whole Life - What is it, how does it compare to Term Life, what are the differences? Among the types of life insurance available to consumers and those who want to provide financial stability for their loved ones in case of mishap, the whole life insurance option offers multiple benefits. However, this type of life insurance is not for everyone.
Insurance Coverage
First, it's not the most economical plan available. If you just want life insurance coverage and nothing more, you don't need to pay for whole life. On the other hand, if you're willing to pay for a better plan, with whole life you can lock in a specific benefit and cost that doesn't change for as long as you continue to pay for the plan. Additionally, whole life plans build up value that can be withdrawn as cash if you desire. So, paying for a more expensive plan is not always a bad thing if you can get beyond the cost. History When conventional life insurance was first being sold it was entirely term insurance. There were no whole life insurance plans being offered. Term life, in comparison, basically pays a set rate for a limited time window, usually 20 or 30 years. After that, the consumer gets nothing else, the insurer gets to keep all the premiums, and the consumer has to go out and buy a new policy afterwards. A replacement plan afterwards is typically more expensive due to a person being older as well. However, consumers wanted more. And if there is one thing about business, if someone builds a better mousetrap, those looking for more in life insurance will come. Responding to market demand, some insurers began to repackage their offerings to be more than just term insurance.