Whole Life Insurance provides a guaranteed return

Like many forms of insurance, term life insurance is one of those policies you hope you’ll never see a return on. You buy it in case you die before your time, and you know that if the worst happens it will financially look after your loved ones when you are gone, but you’ll still hope never to have to cash it in.

There is however a different thought process when you buy whole life insurance however, and despite being around eight times more expensive than term life insurance, whole life insurance still has its fans. People taking out whole life insurance will still hope they never have to make a claim, but they’ll know that when the time comes, they’ll still have a policy.

The biggest advantage of whole life insurance for many of its customers is the guaranteed return on investment. They see it as more of an investment, which doubles as in insurance policy. If you die early, then your family will still see a huge return, and you won’t have paid for all your premiums. If you outlive your premium payments and eventually die, your family will get back at least what you paid in premium payments, and a little more.

The insurance company will have made money on your premium payments over the years and that’s why they can afford to pay out so much, compared with how much you’ll pay them.

As a guaranteed return, customers are happy to invest in their families future, knowing that at some point the money they’ve invested will be passed on.

Another advantage is the ability to speed up the process of accessing your investment. Once you’ve stopped making contributions and have reached a stage where you no longer need a life insurance payout for your direct family members you can start to borrow money against your final payout, using the money to pay for children’s house deposits, for holidays or to aid with the general cost of retirement.

Many people find that once their children have left home and they’ve paid off their mortgages that they no longer need a life insurance policy, and that’s why they can borrow against their payout.

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