Insurance and Financial Information

When it comes to comparing Term and Whole Life Insurance options, Whole Life policies sometimes get a bad rap. One reason being that it costs more for the same amount than term level life insurance. Term Life has its place for a young couple starting a family. They need as much insurance as they can afford. However a small whole life policy would be a good investment, and should be worked into their financial planning if at all possible.

An Investment

How can life insurance be an investment when most policies only pay upon death? Let me tell you a true story related to me by my mother. She said my dad bought a whole life policy within a few years after they were married. Until then he only had a Term Life policy through his work that would cover little more than burial expenses. The new whole life policy would give my mom a little extra to pay the bills should anything happen to him.

This Whole Life policy helped them realize a dream come true and make extra money along the way. Several years went by. Along came one child, then two, then three and four. They bought a house in the suburbs, but their dream was to get a small parcel of acreage in Central Florida's horse country. Finally an opportunity came--five acres. The price was right, but $1,000 was needed for the down payment; the balance could be paid off on time by monthly payments. Mom said the payments weren't a problem. By then my dad's salary could handle the extra for the monthly payments, but where would they get the thousand dollars?

My mother drove herself nuts trying to think of a way to come up with the thousand dollars. She just couldn't find a way, until she remembered the whole life insurance policy that they signed up for years ago. She remembered something about the difference between a whole life policy and a term policy that could help her in her time of need.

The ability to borrow funds from the policy is one of the big benefits of it. She was able to phone the insurance company and learn that the policy had grown to having a cash value of more than $1,000 that could be borrowed against.

You Can Borrow From The Policy

'Borrow your own money, you say?' Yes, but at low interest rates and you can take as long as you want to pay it back into your policy. There are no set payments. A small amount of interest does accrue and is added annually to the loan balance if the interest amount isn't paid. The insurance company doesn't put you on a set payment schedule or penalize you if you miss a payment as banks do. However, it is wise to put money back into the principal of the account, so there will be full value of the policy upon death, as well as keeping the cash value up for future personal investment loans to yourself. Mom and Dad got the five acres, but never built a house on it. Several years later they sold the parcel at triple the original purchase price. From that sale they bought business property, which appreciated in value, and in a few years sold it and the proceeds helped them in their retirement years.

Mom said that little Whole Life insurance policy really saved the day a few other times too when they needed a few hundred dollars suddenly in an emergency. Just like the little Energizer bunny rabbit, it just kept on giving and giving. A Whole Life insurance policy may 'literally save your life' some time when you need money and can't borrow money from the bank for one reason or another.

Be assured, Whole Life Insurance can be a life saving asset. So do yourself a favor and at least request Whole Life insurance online quotes along with any Term Life quotes you may be obtaining. Compare your lifetime needs against each policy type and then you'll be in a position to make an educated decision about what's best for you.

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