Whole life insurance: Protection for you and your family

Whole life insurance: Protection for you and your family


Whole life insurance: Protection for you and your family

Whole life insurance is called whole life because it covers you for your whole life. That seems pretty clear! But many people don’t understand why whole life is important. Here’s a simple explanation.

What does whole life insurance do?

The whole point (no pun intended) of life insurance is to make life easier for the people you leave behind when you die. Most people don’t have enough money saved up to pay for things they might need at the end of life, like their funeral or the out-of-pocket medical costs they might run up during a long illness. A whole life insurance policy can help pay for some of these costs, so your family doesn’t have to.

When should you buy whole life?

Whole life can be pretty affordable, but even more so if you buy it while you’re young. And the premiums you pay for whole life can earn interest you can use later in life. So the earlier you start paying premiums, the more interest you can earn.

 Some other things you should know

Different whole life policies have different features and benefits. Some cover long-term care. Some pay out early if you have a terminal illness. Some let you pay a little more per month so you can stop paying premiums when you’re retired and on a fixed income. And you might be able to buy policies for your spouse and children.

If you buy whole life at work, you’ll probably get cheaper rates. When you retire, you keep the policy — if your premiums were deducted from your paycheck you can get billed at your home.

With the typical funeral costing around $8,500, and out-of-pocket medical costs going up every year, it’s easy to see how a whole life benefit could come in handy. You could think of it as a really nice gift to leave your family.