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Life Insurance Policies - Whole Life Insurance Policies Explained
By admin | April 16, 2008
Life insurance policies are there for us in order to make certain that our loved ones are protected in the event of an untimely tragedy. Most life insurance policies are very affordable, however, this does depend upon the type of life insurance policy that you choose to purchase and the amount of life insurance coverage you buy. Let’s take a look at one of the most popular life insurance policies that are available.
Whole Life Insurance
Whole life insurance policies are designed to provide protection for your whole life. When you make your premium payments, a portion of the money goes towards buying life insurance protection, while the difference goes into a savings account that accumulates “cash value”. This cash value will grow over the life of the policy and you may actually borrow against it later in life, if you choose to. Many people use this fund for retirement, college for the kids, a second honeymoon, repairs on their home or many other different wants or needs.
The “cash value” should not be confused with the “face value” of the policy. The face value is the actual amount of coverage that you’re paying for. An example would be a $50,000 life insurance policy. The face value in this example would be $50,000. If you bought a one million dollar policy, then your face value would be one million. Cash value is only the amount that has accumulated in your savings fund. This amount does not reach face value until either the death of the insured individual or the age of 100 years, whichever occurs first.
Honestly, Whole Life Insurance Policies are not as popular as they once were. They’re more expensive than most other policies and the interest rate given on the savings plan is not that high. Most people can find better rates by investing in other funds. Term Life insurance policies are more popular now than ever. If you’re considering buying a new life insurance policy, Term life insurance policies are now the best way to go.
Joe Stewart Is A Webmaster And Former Life And Health Insurance Agent. He’s Made Understanding Life Insurance Easy For Others. You Can Get Free Life Insurance Quotes At His Website TheLifeInsuranceGuys.com or by clicking on Life Insurance Policies
Tags: cash value, face value, life insurance, policies, policy, premium, premiums, term life, whole life
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