Great Whole Life Insurance Tips

Some great whole life insurance tips for maximum ROI

The best whole life insurance tips are the simple ones. Buy a policy as early as possible, and hang on to your policy for as long as you can. This is the best way to maximise the return on your investment.

Great Whole Life Insurance Tips

When people see life insurance quotes, the first thing they notice is that whole life insurance premiums are considerably higher than term life premiums. The lower premiums of term look very attractive to many people.

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What they do not realize is that all of the premiums they pay into a term life policy goes directly to the company. While a good portion of the premiums they pay into a whole life policy comes right back to them.

Term Life: No Value Unless You Die

Insurance salespeople that promote term life insurance will try to get you to focus only on the low premiums, without telling you all of the advantages a whole life policy. True, a non-smoking person in his twenties in good health may be able to buy a $100,000 term life policy for about $20 per month. Whereas a whole life policy for the same amount will cost more than twice that.

What the insurance agent neglects to mention is that in the long run, the whole life policy bought at a young age will end up costing less. If you purchase a 20 year term life policy, try to renew it after the term is up. If the company allows you to renew, the premiums will be far higher. And that is only if you are allowed to renew.

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You are now quite a bit older, you may not be as healthy as you were 20 years ago. Other factors in your life may have changed. If you have been unlucky enough to get a serious illness, then there is a very real possibility that you will be denied coverage altogether. All of the premiums you paid to the company for twenty years are gone.

No Refusal With Whole Life

If you had known about our whole life insurance tips, you would be fine. Your premiums do not increase, no matter how old you get or how your life situation changes.

Plus, if you do decide to cancel, a good portion of the money you paid in will be returned to you. How much is returned depends largely on how long you have held the policy, and the dollar amount of the premiums you paid.

The younger you are, the lower your premiums will be. That is why whole life insurance tips always include to buy your policy when you are young. If your parents or grandparents buy a policy for you when you are born, you can enjoy a fabulous policy, for less than $20 per month, for the rest of your life.

Or, you can cash in the policy to pay for college, start a business or buy a house. The money is yours to do with as you please. But, you will be better off in the long run to hold onto the policy, and take full advantage of the low premiums.

Retirement Planning Whole Life Insurance Tips

A whole life insurance policy does not just pay out when you die the way a term policy does. You can actually use the money while you are still alive.

One option many people choose after retirement is to convert their policy into a fixed annuity. Of course, you cannot cash in the face value of your policy, only the accumulated cash value.

You can then use the funds any way you like. These funds may be subject to taxes. Ask your insurance agent or financial planner if this is a good option for you. You should find out how much cash value your policy holds before making any decisions.

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Whole Life Insurance: an Alternative Form of Emergency Funds

A whole life insurance policy provides a source of funds in the case of emergency. Whole life insurance tips advise not to borrow against your policy or to make any withdrawals. But, in extreme instances you may not have any other choice.

Great Whole Life Insurance Tips

It is comforting to know that in the case of emergency, the funds are there if you need them. This is also not possible with a term life insurance policy. A term policy does not provide a nest egg or an emergency fund. All of the premiums you pay are pure profit for the insurance company.

You do not have to pay back any loans against your policy, but you may be required to pay interest charges. Any outstanding loans at the time of your death are deducted from the face value of your policy, and the remainder is paid to your beneficiaries.

Whole Life Insurance Tips: How Much Coverage Do You Need?

When thinking about buying life insurance, many people have a hard time deciding how much life insurance they need. Some agents may try to sell you more than you need, because they get paid a commission on every policy they sell. Make sure you deal with a reputable agent who has your best interests in mind, and not their own.

Life insurance is emergency money. It is designed to help your loved ones in case something happens to you. The actual amount you need will change over the course of your life. Once your house is paid off, and you have built up savings, you may think you no longer need life insurance at all.

That is why many people cash out their whole life insurance policies after they retire. They no longer need the benefits to replace their income, make the mortgage payments, or to cover other financial obligations they may have had when they were younger.

When calculating how much coverage you need, consider:

  • Your monthly expenses. Include all monthly expenses, like groceries, utilities, child care and transportation costs.
  • The age of your family. Young children will be dependent upon their parents for at least 15 to 20 years. Make sure your life coverage is enough to provide for your family in the event of your early death.
  • Your debts. This could include your mortgage, loans and credit cards. Not the monthly payments, calculate the amount outstanding so that your beneficiary is able to pay everything off in full and not be burdened with any debts.
  • The cost of the funeral. Make sure your policy includes enough funds to cover funeral costs.
Ideally, your policy will pay off all outstanding debts, cover the cost of the funeral, and provide several months of living expenses for your family.

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With these whole life insurance tips in mind, your financial planning will be much easier.

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