Why Choose Whole Life Insurance

Whole life insurance is a permanent type of life insurance which remains in effect your entire life as the same premium as long as the premiums are paid. It is also known as "cash value" insurance because you can borrow against these funds.

You should choose whole life insurance if you want to accomplish any of the following:

• accumulate cash value for a child's education
• accumulate cash value for retirement
• pay funeral expenses
• provide money for charity

This type of insurance may be good for you if you do not expect your needs to diminish over time. A portion of the premium you pay goes into a reserve fund that builds up over the years your policy is in effect. This reserve fund is tax-deferred until you withdraw it.

Premiums for whole life insurance policies generally remain constant over the life of the policy. The premiums are paid periodically according to the amount indicated in the policy. There is also an option to pay the premium in one lump sum. Whole life insurance is expensive. If you are on a limited budget, you may not be able to afford the amount you really want, but whatever you can afford will be there for your family in case of death as long as the premiums are paid.

Before you purchase a whole life insurance policy, you should consider carefully how much insurance coverage you need. It is better to get a smaller coverage amount and be assured you can pay the premiums rather than overextending yourself and having your policy cancelled. If you default on your payments, you will lose your entire investment.

You should consider the following when looking at whole life insurance products:

• A life insurance policy that has a guaranteed cash value starting the first year
• A policy with the highest cash value in the first year
• A policy that lets use the accumulated cash value of the life insurance policy to pay the premiums if you can not

Discuss your life insurance needs with your financial advisor or with an insurance broker. Go over the various options and review your budget. Make your determination based on what is best for you, your family, and your budget.