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Is whole life insurance right for you?

On Behalf of | Jun 10, 2020 | Insurance Law |

Having insurance is just another part of being a responsible adult. But while many people in Washington carry coverage for auto and health care, they often overlook other types of coverage. For example, life insurance can be the difference between a family just surviving or thriving following the death of a loved one. When considering which type of life insurance might be best, it is important to understand the benefits and drawbacks of whole life insurance.

Term life insurance is only a temporary form of coverage, which expires at a specific date. A whole life policy lasts for the policyholder’s entire life. The policyholder can purchase the appropriate amount of coverage and then designate benefits, such as children or other loved ones.

Other than lasting one’s entire lifetime, one of the most significant benefits of whole life insurance is the ability to build up equity. A portion of the policyholder’s monthly premiums goes into a savings account, which accrues interest and can be borrowed against. So someone who has been paying monthly premiums for years or even decades could borrow some of that money to help pay for his or her child’s education at a Washington college or university. However, if he or she fails to pay back the loan, then the unpaid funds are deducted from the death benefits.

Committing to whole life insurance early on in adulthood can be helpful for those who want to both build equity as well as ensure their loved ones are cared for in the future. Still, it is never too late to make a smart decision regarding life insurance, whether term or whole life. But it is also important to understand that whole life insurance might not be appropriate for everyone, and disputes can arise easier than one expects. Speaking with an experienced attorney could help clarify which option is most appropriate for someone’s unique situation.