November 22, 2017

Advantages and Disadvantages of Whole Life

Some of the advantages and uses of whole life insurance are:

  • The principle advantage of whole life insurance is that it is permanent insurance and can be used to satisfy permanent needs.
  • The level premium allows policyowners to know exactly what the cost of insurance will be and offers a form of forced savings.
  • Whole life builds a living benefit through its guaranteed cash value, which enables the policyowner to use some of the cash for emergencies, supplemental retirement income, or for living expenses.

Two of the disadvantages of whole life insurance are:

  • The premium paying period may last longer than the insured’s income producing years.
  • It does not provide much protection per premium dollar as term life insurance.