Let us begin with a definition. What is whole life insurance? The industry called permanent insurance. What they interpret as meaning it is always there for you (as long as you pay premiums and species are not in). Wow! I can tell you in cash? Wait, we'll get to that. This is in contrast to insurance, which, as its name suggests, is only valid for a period - a number of years, then it disappears, it is nonexistent. So when you buy whole life insurance? When there is a debt exists or will exist, you do not want to stick to your heirs to pay.

What are they? The tax on estates, for example. In the case of the rich, the tax can significantly reduce the value of your estate. Also succession of lawyers, last I checked, is still charging for their services. So you die and you need at the hospital, a bundle of money that your insurance does not cover. Have you looked at the cost of funerals these days? You are in love with your heirs, and you want to protect against such "after you are dead" of spending, what are you doing? The whole life insurance comes to the rescue.

Of course, there are certain drawbacks and disadvantages of buying whole life insurance. The first is the cash value. What is the value in cash? This is the most important thing to recognize about whole life insurance. Wrapped in a fancy, fine print, difficult to understand the language, when you buy whole life insurance you are actually buying two things. That is why it is so expensive. Part of your premium goes to savings (or value if you prefer the jargon of the industry). The bad news is when you die; your heirs get only the face value of the policy.

Insurance companies have an explanation for swallowing your values. Ask them to explain to you. I cannot. Before dying, you can cancel the policy and they will give you the value, or you can borrow against the cash value. The second thing is not to be missed "dividends". I discuss the background on my site (see below in the author box for the URL) for a discussion of these "dividends". The rapid conclusion I draw is: Never buy a policy that "pays dividends."

In conclusion, there are times when it is certainly advantageous to consider the purchase of whole life insurance. As with any financial product, you, know exactly what you're getting into before deciding to purchase. Life insurance companies are sound financial institutions and have an excellent reputation for paying claims. Rarely will go under due to mismanagement, but the industry finds a way to pay all their claims. Remember what the spirit said: "Overall, it is better to buy shares of the insurance company that the purchase of insurance." Insurance companies are in place to make a profit, and when they do not, they raise their premiums.