This drop may have happened because many people don't think they can afford life insurance or don't know their options.
What Is Whole Life Insurance?
As the name suggests, whole life insurance usually covers the insured for their entire life. This type of policy tends to offer fixed premiums, so they won't go up and the benefits will stay the same.
Whole life insurance also potentially offers a tax-deferred cash value, which could serve as a form of savings account for the future. Because it can double as a savings account, many younger people can benefit from it.
The death benefits in a Whole Life policy also don't change, so your beneficiary is guaranteed to get what you signed up for.
Term vs. Whole Life Insurance
You might be torn deciding whether you want to get term vs. whole life insurance. Before you decide, you should understand the difference between the two. Your local, independent insurance agent can also help you understand your options.
As the name indicates, term life insurance only lasts for a certain period of time. Most term life insurance plans are 30 years. However, it's not uncommon for some of these to last either 10 or 20 years.
When the term insurance ends, so will the benefits - and you will need to re-apply.
Most people who sign up for term insurance are those who are paying a lot of bills and don't want to leave their families unprotected. This may include those who are paying a mortgage, student loans, or are the primary breadwinners for their families.
The idea is that when the term insurance ends, so will your family's need for it; for example, when the kids are all grown up.
And unlike term insurance, whole life will keep going for the rest of your life.
Benefits of Whole Life Insurance
Besides providing your beneficiaries with money in case of your death, whole life insurance can offer some benefits while you're still alive.
As we mentioned before, whole life insurance can also double as a savings account.
A portion of your premium is directed towards a savings plan, and over time it has a cash value.
If you wait for this cash value to build up and you ever need money in the future, you can withdraw it.
Death Benefits and Fixed Premiums
With whole life insurance, you don't have to worry about the premiums increase as you get older. The premiums will remain the same throughout your life.
The younger you get it, the lower your premiums will be.
Rate of Return
Not only will a portion of the premium go towards a savings account, it will also earn interest and grow over time.
Whole Life Insurance: The Bottom Line
We hope this article has answered the question "What is whole life insurance?"
Remember, this kind of coverage will protect you throughout your life. The premiums won't go up, and you'll receive a cash value.
Are you a single dad or know someone who is? If so, check out this article about the importance of coverage! Be sure to talk to an independent insurance agent about your life insurance needs. Find a local agent here.