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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
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be withdrawn as cash if you desire.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.
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