Whole life

What is whole life insurance?

Whole life insurance is a permanent life insurance coverage designed to pay a lump sum upon death. In the past, whole life insurance policies are more popular than term life insurance policies because of the life coverage nature of whole life insurance policies. People just don't want to pay for a life insurance policy that will expire after a certain number of years and leave them with nothing in the end.

Why are while life insurance policies much more expensive than term life insurance policies? What are the differences between whole life insurance and term life insurance?

Whole life insurance is significantly more expensive than term life insurance because, as its name suggests, whole life insurance covers the insurer for life whereas term life insurance policies only cover the insured for up to a certain number of years. This means that for, a whole life insurance coverage, no matter when the owner of the life insurance policy dies, his or her beneficiary will get paid the death benefit. There is no term involved like term life insurance.

If you look at some of the whole life insurance quotes and compare them to term life insurance quotes, you will see significant differences between the whole life insurance quotes and the term life insurance quotes.

Whole life insurance used to be more popular than term life insurance among the wealthy since the premium paid to the whole life insurance company will not be wasted. The beneficiary of a whole life insurance policy is guaranteed to get the death benefit upon the death of the whole life insurance policy owner. Nowadays, variable life insurance is more popular than whole life insurance since variable life insurance is always cheaper than whole life insurance. 

What to consider when purchasing whole life insurance?

Whole life insurance may be purchased by:

• an individual or
• an employer. 

Whole life insurance policies also offer the choice of:

• insuring one person (paying on that person’s death) or
• insuring two people (paying, typically, on the second death).

Proceeds  from Whole Life Insurance may be used to provide ongoing income for survivors or for payment of final expenses (including estate tax).

What about the cash value of whole life insurance policies?

The cash value in whole life insurance is invested in the life insurance companies' general accounts.

The most highly rated and top selling whole life insurance providers these days are:

• Lincoln National
• Hartford
• Manulife
• Nationwide
• ING
• John Hancock
• SageMark Consulting 
• Pacific Life