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Whole life insurance explained

 Whole life insurance explained

Whole life insurance explained
principal life insurance company

Don’t buy Whole Life Insurance before reading this

Life insurance is an important decision for your future. Be careful before you start asking for quotes, as this may open the portals for clients, who will start contacting you. 

As these agents call you, they will bombard you with information you do not understand. We find that this ultimately discourages you from moving forward. 

We want to make sure you are ready to take life insurance calls so that you get the coverage you need.

This article will cover the top five things you should know about whole life insurance.


1. Understanding Whole Life Insurance

2. Reasons To Purchase A Whole Life

3. Using A Whole Life Policy

4. Picking The Right Whole Life


This complete life insurance article will be your guide to making the best possible decision while looking for a life insurance policy. 

Regardless of whether you want term insurance or permanent coverage, this article will help guide you in the right choice. After reviewing this article, you will feel confident talking to agents, getting quotes and coverage.

Understanding whole life insurance

Whole life insurance is the original insurance. When insurance began, everything that existed was for life. Understanding life insurance fully is not as difficult as it might sound.

However, be sure to educate yourself about the different types of life insurance available to you. There are several different types of insurance policies that may suit your needs, such as the ones below:

Different types of life insurance policies:


Whole Life Insurance 

Variable life insurance

Comprehensive life insurance indexed

Comprehensive life insurance

Guaranteed issuance of life insurance

Accident death insurance


Whole life insurance explained 1
american general life insurance company


Reasons to purchase life insurance in full

Knowing all of the different types of insurance options, it is time to consider them.

A simple question you should ask yourself is:


Why Consider Buying whole life insurance?

Most people buy whole life insurance for two reasons: monetary value or death benefit.

These are very different reasons for purchasing all life insurance, but let's start with the death benefits as this applies to any life insurance.

Death Benefits Protection

If you purchase whole life insurance to protect death benefits, then whole life insurance may not be for you. You will want to make this clear to your agent when you initiate contact. 

Depending on your personal needs and health situation, you will need to look at a comprehensive life insurance or life insurance policy.

Using a Whole Life Insurance Policy

He has written many books on the benefits of whole life insurance such as “Bank on Yourself” and “Infinite Banking Services”. But let's do a quick review of how to use the whole life.

How would you like to use life insurance in its entirety?

Depending on how you want to use cash value life insurance, it could drastically change the design you choose.


Are you thinking of using it to buy real estate?

Are you looking to use it to supplement your retirement?

Do you want jobs?

Do you want it for education savings?

Maybe you want it for a vacation?


Regardless of your reason for wanting whole life insurance, each of these goals will have the most appropriate design for it.

How much can you save each month?

Life insurance is not for everyone. If you do not have low-performing assets or have the power to save, then whole life insurance as an investment tool may not be the best starting point.

However, if you have cash in excess, how much can you save on a deferred tax basis? $ 100, $ 500, $ 1000, $ 2000 a month?

Do you want to save a large amount upfront and then only have to fund your policy for a few years after that with a lower premium? Do you want to pay only one installment? All of these are options!

When looking for life insurance as an "investment," the primary concern is the monetary value, not the amount of death benefit.

Remember that depending on what you are looking to achieve, you may need a significant death benefit to avoid your policy hitting the MEC and becoming a rate stop contract. If the contract MEC’S, many life insurance tax benefits will be completely lost.


How quickly would you like to reach your monetary value?

Timing is everything, and with whole life insurance, it's no different. When you plan to access your monetary values, the time you wish to do so can make an even bigger difference in policy design.

Will it reach your monetary value in the first 1-5 years?

Would you like to reach your monetary value in years 10-20?

Do you want to reach monetary value at the age of 65?

Once you have a clear understanding of your investment goals, you are halfway there. Then you need to know how you would like to use cash value life insurance. Accurate information about your intentions can help the agent guide you to the correct whole life insurance.


Picking the Right Whole Life Insurance 

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Once you know how much coverage to buy, start looking at specific life insurance policies.

It's a good idea to keep a few things in mind while shopping:


Be careful to enter your information on every site you check out. There are many sites that, after entering your information, agents will start accessing them, and many of them have high-pressure selling methods.


The cost of life insurance can be very different from almost identical insurance policies. When shopping for whole life insurance.


Especially if it is "investing focus", you need to make sure that you are working with someone who has experience with tailor-made policies. 


Do not accept the first quote you receive; Access to multiple brokers. Once you start talking to the many agents, you will want to keep asking questions to understand the differences to choose the best policy.


Don't go for the cheapest policy. A reasonable premium is not the best option all the time. You will need to consider the strength of the company, growth in monetary value, and past performance.


You need to get quotes with your health assessments. If you are overweight or smoking, your rates and monetary value will be very different to anyone who is not.

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