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Whole Life Insurance Pros And Cons
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Life insurance, either whole life or term, may have one of a number of purposes. The bottom line is protection but protection from what? The whole life insurance pros and cons relate to the annual cost of the insurance and the benefits which we will discuss later in this article.

The military has life insurance. I had $10,000.00 while I was fighting in Korea which my parents would have collected if I took a fatal hit. I could have continued this insurance, as did many World War II veterans, but I was not wise in those matters after I was discharged and I guess I thought I was going to live forever.

Those who do keep their military insurance end up paying nothing for it as time goes on. Many people who served in World War II are now collecting that insurance, that is, their beneficiaries are. That amount pretty well covers funeral cost which are ridiculously high.

Almost one million policies for WWII veterans are still in force, some using the dividends to increase the value of their policy. The average holder is now over 80 years old. Almost two hundred thousand Korean veterans (the smart ones) still have this term insurance some purchasing more insurance with the dividends.

If you are a disabled veteran form military service or not, you should contact the Veteran's Administration to see what benefits you may be entitled to including mortgage insurance. Those who fought in Vietnam and in the Bush Wars should contact the Administration.

Life insurance can be used to protect from the loss of income if the breadwinner passes on. This is particularly important for families with children. When the income stops coming in, the cost of raising a family do not. So families should have protection.

Life insurance can provide retirement income. These policies are usually annuities. My wife and I have annuities in our IRAs which have guarantied protection of principal and have been remaining stable in value despite of our required annual withdrawals.

Life insurance can protect other assets. Your surviving spouse can keep that Picasso and will not have to sell it to feed the kids.

Term insurance is inexpensive at first, in the early years when family income is lower. It increases in cost as the policy holder gets older. Whole life insurance has a steady cost and dividends. One of my wife's policies keeps increasing in value because she never collects the dividends. She could use the dividends to pay the premiums if she so desired. So, a whole life policy increases in value at a constant premium. Term insurance increases in cost with the initial benefit.

Term insurance is often provided by employers as a group policy. You should take advantage of this. I had such insurance but the policy canceled the program and I was out of luck. So were all the other employees of the company. I could have continued the program but at a ridiculous cost. You may want to cover yourself beyond what your company offers.

There are many kinds of insurance properties. As you learn about insurance, you will be able to pick options that are good for your future. Many of us have both whole life and term insurance. Later in life, the whole life may become adequate to your needs and you may want to cancel or convert your term insurance (convertible term) to whole life using your current age,not your age when you purchased the policy.

You will want to read the fine print on policies you are considering and having a reliable insurance agent is a good idea. You should realize that insurance agents are trying to earn the highest commissions possible. Annuities pay such commissions so you will want to make sure that having the policy is in your interest and not in his.

Fly Old Glory!


Street Talk

Thanks for the great info, John.

Reply
  about 8 years ago
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