Whole life insurance isn’t just insurance – it’s also a life insurance investment. It won’t be the most glamorous financial investment you can make. It’s not Microsoft and it’s not Apple, but it’s for you. You won’t get super-high returns on a whole life insurance policy, but you certainly will get peace of mind and financial independence for your family. If the recent financial crisis has taught us anything at all, it’s safer to go with a long term investment that won’t lose money on you in the end. Aside from being a great life insurance investment, a whole life insurance policy comes with a number of other benefits.
Life insurance companies have displayed an uncanny ability to grow your money in a modest and safe manner and they’ve proven to be much more dependable with your money than the banks have been. There are a number of reasons for this, but one of the main reasons is that life insurance companies play it safe unlike hedge and mutual fund managers. They’re looking into the future 5 – 20 years in an effort to grow your investment. Your money is put into bonds and diversities that are mature and wide ranged in industry and location to keep the risks as low as possible.
You’ve got safety in state regulations with your whole life insurance investment portfolio and you’ll find that they’re also conservative and structured, as well. Each state has insurance commissioners that have deemed that policyholders must be protected from company default by guarantee associations and reserve pools. Your whole life insurance is also protected via re-insurance whereby the life insurance company purchases insurance from another insurer to insure your investment. It sounds circular, but it’s an incredibly good safety net.
You will also gain an advantage if you buy into a participating whole life insurance policy instead of a regular one. A participating policy will provide you with dividends that are based on the insurer’s annual profits which you can sink back into your policy. The final advantage, which might actually be the best one, is that all dividends are guaranteed once declared and your premiums will never change throughout the life of the policy.