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Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed and known small loss to prevent a large, possibly devastating loss. An insurer is a company selling the insurance; an insured or policyholder is the person or entity buying the insurance. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice ofappraising and controlling risk, has evolved as a discrete field of study and practice.

Advantages and Disadvantages of whole life insurance

The article focuses on advantages and disadvantages of whole life insurance.
It seems pertinent to define whole life insurance first. Whole life insurance is that refers to the insurance policy in which you pay premiums throughout your life and your beneficiary will be paid after your demise. The premiums you pay will also be submitted into your cash account and divided will be applied.

Advantages of Whole Life Insurance:

  • Cash values that can be borrow or surrendered.
  • Monthly premium amounts can be fixed to meet financial condition.
  • You can purchase another policy without having medical examination.
  • Valid as long as you are paying monthly premiums.
  • Provision of saving account or cash account
  • Free from mental stress of being uninsured
Disadvantages of Whole Life Insurance:
  • Premiums must be paid monthly unless you die (That is you have to pay entire life)
  • In case you cancel the policy before you die, you will have to ensure loss in terms of money and premiums paid.
  • You may be short of funds for other polices and investment

Conclusion:
Whole life insurance has more advantages that its disadvantages. You must review all advantages and disadvantages before you buy whole life insurance policy.
Posted by jimmy at 6:59 AM
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