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Whole life insurance – basic permanent coverage everyone must have

Friday, December 9th, 2011

Purchasing a life insurance should be done with care and responsibility, since it is to protect for a lifetime and beyond. It will protect the loved ones in the event of unforeseen circumstances and protects the policy holder when involved in accidents. Applying for a permanent life insurance is more beneficial than term insurance, since it offers better protection and optimal coverage. There are many types of permanent life insurance, and the most basic of it all is whole life insurance.

Whole life insurance gives financial benefits as long as the premium payments are made on time. It is best if life insurance is taken at a young age, since the premium rates are considerable lower for young policy holders. A fraction of the premium paid is put into savings and that sum of money starts accumulating interests. These savings help a lot even when there is a financial emergency, since it allows drawing loans on this amount. But the amount drawn must promptly be returned on time, or it could make the policy void.

The cash benefit in the untimely death of the policy holder is given to the immediate family members and it is a non taxable income. This amount does not decrease at any given time, and can either be taken all together or as monthly pensions until the amount lasts. The premium amounts are the same throughout the duration of the policy. But it can be paid in long term, or can be paid in large for a short time. The cash benefits obtained keeps increasing with the premium payments and taxes deferred every month. Even if the policy is closed for some reason, the cash value is still returned.

Whole life insurance policy lets the policy holder use the dividends either to earn interests or to reduce the premium rates paid. Purchasing the whole life insurance must be done with patience and with thorough research. Internet is the best place to shop for good deals because the insurance quotes can be compared at ease. To compare insurance quotes there may be some request forms to be completed and submitted. Supplying accurate information is mandatory to receive an accurate quote and a realistic figure. Buying life insurance becomes easy if some time is spent on finding the best deals even if the premium rates are slightly higher. The coverage must be chosen such that it offers enough cash returns upon maturity, and keeps dividends and cash values constant. Whole life insurance is certainly better than term life insurance, which provides conditional coverage and has lot of hidden clauses. Purchasing whole life insurance ensures unconditional coverage and no hidden clause that trouble the family at the time of claim. But there are many other types of permanent life insurance to explore before buying whole life insurance, since it is the basic kind. Buying life insurance should never depend upon the premium rates since it is the most important protection for every individual. Protecting the family after all, is the primary responsibility of every individual.

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