Types of Life Insurance > Whole Life Insurance
In a previous post, we explained some of the basics of life insurance, including a detailed look at term life insurance. As the other major option for securing your family in your absence, Whole Life Insurance might be a policy worth purchasing. In this article, we’ll provide the details everyone should know before buying a whole life insurance policy.
Who should buy whole life insurance?
According to Nerd Wallet, whole life insurance is a good policy to buy if you:
- Need coverage that lasts for your entire life.
- Want the payments to stay the same (called level premiums).
- Want a guaranteed return on the cash value that builds up within the policy.
How do I know how much coverage to buy?
This is where an insurance specialist comes into play. Depending on your current financial situation, you might need more or less coverage. For example, you can choose a policy that only covers final expenses — such as a funeral — but doesn’t fund anything else. If you have plenty of money in savings (and you don’t plan on that changing) you might need minimal coverage. However, some policies don’t offer such limited coverages. If you have a child with special needs, want to set up a trust for your children or family, you’ll need to look into more coverage options.
What’s the approval process like?
There are different processes that require different types of applications. For example, there are simplified issues and guaranteed issues of these policies. Simplified issues require that you answer a few general health questions but don’t take a medical exam whereas guaranteed issue requires none.
These options are worth considering if you’ve been turned down for standard life insurance due to health problems — but beware of the downsides. The death benefits offered are relatively small, and the costs per $1,000 of coverage are higher than for policies that require a medical exam. In addition, these policies don’t pay the full death benefit if you die within the first few years of coverage.
The last type of a whole life insurance application processes is a fully underwritten policy, which requires a full medical exam.
In our next post, we’ll explain how to evaluate cash value on policies and riders you can add to your policy.
About National Catholic Society of Foresters
At National Catholic Society of Foresters, we pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a Fraternal Society, which means the sales from these financial services products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs. Our portfolio is extensive, ranging from various life insurance policies to IRA’s to support your financial needs no matter what stage of life you’re in. For more information, contact our friendly experts today at (800) 344-6273.