Whole life insurance is intended to do just that- protect the insured over the course of their entire life. Your premiums stay a predictable level amount each month, and the premiums accrue into an account that you can eventually borrow against if need be. There is also a predetermined agreed upon cash surrender value, so in addition to providing life insurance benefits upon your death, whole life insurance can be viewed as an investment strategy as well. Here are three scenarios where whole life insurance may be the right product for you.
You Have Dependents
If you have a spouse and/or children that rely on you for their well-being and support, a whole life insurance policy will protect them and help them adjust in the event of your sudden demise. Mourning is a difficult process, made even more so when people are left scrambling to worry about their financial responsibilities. This is particularly true in the case of a stay-at-home mother who has been out of the workforce while raising children. Knowing they are protected and insulated against a major change in lifestyle can provide tremendous peace of mind. The funds can also be used to pay for your children's college expenses. A whole life insurance policy will also provide immediate cash to tend to living expenses whereas other assets may be frozen for months while everything goes through probate.
You Want To Privately Provide For Others
The probate process is a part of the public record, and anything that has to go through probate will eventually become known. Whole life insurance policies that do not have the deceased's estate listed as a beneficiary do not have to go through the probate process. This means you can choose a beneficiary with whom you don't want the nature of relationship publicly disclosed. This may be a long-term lover that you want to care for or a previously unrecognized child born out-of-wedlock.
You Own A Business
Whether you are the sole owner or are just a key partner in a business, whole life insurance policies are often underwritten in an effort to indemnify the company from any negative effects cause by your or your partner's sudden loss. This money can be used as working capital to keep the business afloat while things are re-organized, such as hiring new employees, or to buyout the deceased partner's shares or interests in the company from their surviving family members.