Whole Life Insurance For Parents Explained

Unlike term life insurance, whole life insurance is a form of insurance that you keep for the duration of your life, and pay into each year. There isn't a time at which it "expires".

Whole life insurance policies became popular when a number of buyers complained that they could pay for many years into a term life insurance policy and never get any of that money back.

Whole life insurance combines a term type of policy with an investment component that may or may not be useful to parents. The investment component could be in anything from stocks, to bonds, to a money-market account. As the cash value on your whole life insurance policy builds, you would even be able to borrow against it.

However, there are some drawbacks to choosing a whole life insurance policy. First, it's definitely more expensive. You're paying for both a life insurance policy and a form of investment that is similar to a form of retirement.

In contrast term life insurance is very affordable for people who enjoy good health until around age 50. Keep in mind, however, that many life insurance companies won't sell a term policy to anyone over the age of 65, so if you're an older parent looking to buy coverage then whole life insurance might be your only option.

Another thing to keep in mind with whole life insurance is that in most cases it doesn't pay to invest in it unless you plan on keeping the policy for at least 20 years. This is because cashing the policy out before then is more likely to result in lost money, based on fees and premiums.

So if you're an older parent with a new baby or young child to consider, whole life insurance might be a good fit for you.

Of course another option could be to get a renewable term life insurance policy and invest the difference in costs between that and a whole life policy in a money market account that pays off well.

But again, in many cases keeping a whole life insurance policy for more than 20 years can be just as successful if not more so than other forms of investing, so think carefully about how long you will need coverage before choosing your insurance policy.

And finally, don't forget the fees. Many whole life insurance policies come with fees attached. Make sure that you are aware of exactly how much you're paying, what portion is going into the life insurance piece of your policy, and what portion is going into the investment side of the policy.

Affordable Life Insurance Rates
Are Waiting For You!
Choose Your State

Related Information

Types of Life Insurance

There are two main types of life insurance: permanent life insurance and term life insurance.

Read More

Is There a Time When Life Insurance Expires?

Buying life insurance when you're young is a good idea. But does that mean it may expire once you reach a certain age?

Read More

Best Coverage for Your Parents Over 60

Learn about popular types of life insurance policies for parents who are over the age of 60.

Read More

The Benefits and Costs of Whole Life Insurance

What are the pros and cons of whole life insurance? In this article, we’ll break down this form of life insurance coverage.

Read More

Life Insurance for Married and Unmarried Couples

Buying life insurance is a good idea for married couples. Life insurance can replace lost income and offer peace of mind.

Read More

Life Insurance Meaning and Importance

The importance of a life insurance policy is that it helps provide for the financial stability of your beneficiaries if you pass away.

Read More

Variable Life Insurance

Variable life insurance is a form of permanent life insurance. It can offer you coverage for the rest of your life and includes a cash value savings component.

Read More

Reasons for Buying Life Insurance

Life insurance is a good idea for anyone who has financial dependents. Here are 5 top reasons you should consider purchasing life insurance.

Read More

6 Types of Life Insurance Policies

To understand which life insurance policies might be right for you, let's look a little closer at term and permanent life insurance.

Read More