The Pros And Cons Of Choosing Whole Life Insurance Coverage

Insurance Blog

Choosing between whole life and term life insurance coverage can be a difficult decision for many people to make. While both of these options can be beneficial, the fact is that neither of these options will be right for everyone. In this article, you can take a closer look at the pros and cons associated with the option of whole life insurance. Taking the time to learn more about the pros and cons that come along with this option can help you determine if whole life insurance coverage is the right choice for you.

The Pros Of Whole Life Insurance Coverage

  1. Whole Life Insurance Offers Living Benefits - Whole life insurance policies include both a death benefit and living benefits. These living benefits include things such as building a cash value that you can borrow against and the ability to earn dividends which can either be paid in cash or applied to the cost of your monthly premiums.
  2. Guaranteed Coverage For Life - When you purchase a whole life insurance policy, you will be covered for the rest of your life as long as you pay your premiums on time. This means that you will never need to worry about being disqualified from coverage due to health problems.
  3. Guaranteed Rates For Life - The rate you pay when purchasing a whole life insurance policy is the same rate you will pay for the entire time you carry the policy. Your rates will not increase as you get older or if you are diagnosed with any medical issues. 

The Cons Of Whole Life Insurance Coverage 

  1. Higher Premiums Than Term-Life Policies - In most cases you will find that whole-life policies come with a higher price tag than term-life policies. This is due in part to the fact that whole-life policies are guaranteed to pay a death benefit while term-life policies only pay a benefit if you die during the time the policy is active. 
  2. Whole Life Insurance Policies Can Be Complex - In order to provide living benefits, whole life insurance policies are typically tied to investments. This can make the terms of a whole life policy far more complex. For some people, this complexity can make it hard to understand exactly what coverage and benefits their policy provides. 

The Bottom Line

Whole life insurance policies are a great option for individuals who do not want to worry about shopping for life insurance coverage again in the future since these policies are guaranteed to last a lifetime as long as the premiums are paid. Whole-life policies can also offer a variety of living benefits that are not included in term-life policies. However, in order to provide all of these additional benefits, whole-life policies will often be a bit more complex and come with a higher price tag attached.


9 November 2022