Are you thinking about switching up your life insurance policy?
Typically, switching your life insurance is a good idea if you’ve recently gotten married or divorced. It’s also smart if you’ve got a new job, retired, bought a new house, or added new members to your family.
If you’re thinking about switching your policy, you should consider switching to a whole life insurance policy. What is whole life insurance? Why should you switch to this kind of policy? Read on to discover the top reasons to switch to a whole life insurance policy.
Term Life Insurance vs. Whole Life Insurance
Before diving into the benefits of whole life insurance, it’s important to understand the differences between whole life insurance and term life insurance.
Term life insurance covers you for a specific period of time. Typically, it covers you for 10, 20, or 30 years. When you buy your policy, you’ll choose the term and list your beneficiaries. If you pass away within the term, your beneficiaries will receive what’s known as a death benefit.
Typically, the premium and the coverage amount stay the same throughout the term. Term life insurance is usually more affordable than whole life insurance.
On the other hand, whole life insurance provides you with coverage for your entire life. And, you can build up cash value over time within the policy. While whole life insurance costs more than term life insurance, you’re guaranteed coverage as long as the policy stays active.
If you want, you can even convert military insurance to whole life insurance. Check out https://paradigmlife.net/blog/converting-military-life-insurance-to-whole-life/ to learn more about it.
Reasons to Switch to Whole Life Insurance
Here are some of the top reasons to switch to a whole life insurance policy:
You Have a Lifelong Dependent
If you have a child with special needs or some other type of lifelong dependent, it’s a good idea to switch to a whole life insurance policy. With whole life insurance, you can build a trust for your dependent that they can use after you die.
Your Estate Grew
If you have more property and money than you expected, it may be time to switch to whole life insurance. If you pass down your estate to your heirs, they’re going to have to pay estate taxes after your death.
With whole life insurance, your heirs can use the money from the policy to pay the taxes.
You Want to Build Savings
As we mentioned, part of the money you pay for whole life insurance goes toward a “cash value” account. This builds tax-deferred, and you can borrow against it or withdraw money from it.
You can even give up the life insurance policy altogether for the cash. On the other hand, term life insurance doesn’t have any cash value.
Time to Switch to Whole Life Insurance
As you can see, there are many great reasons to switch to a whole life insurance policy. Now, it’s time to decide which policy is right for you. We recommend speaking with a financial advisor to help you choose the right policy.
And, check back in with our blog for more financial news!