When it comes to whole life insurance, most people believe it is simply a policy you pay on every month until you die and then your family gets the benefits. While that is somewhat true, there are many more things you can do with this type of life policy. Here's a look.
When you take out a whole life policy you are paying a premium for not only the life benefit in the event you pass away, but part of it goes into a reserve fund that is also called the cash value of the policy. As the years go by this cash value accumulates into a nice sum that you can borrow against, withdraw it and use it how you wish. You can even simply leave it alone if you wish.
A whole life insurance policy can be used for many different things that include:
* Paying your final expenses and taking care of your family financially
* Using the cash value to fund college tuition for your children
* Leaving money for a favorite charity you have
* Using the cash value to help finance a new business start-up
* Providing coverage for a key man in a business
* Using it for estate planning
As you can see, there are a variety of ways to use this type of life insurance. There are many others in addition to this small list, but it gives you a good idea of your options. So if you have always thought that a life insurance policy was only used in the event of your passing, think again because it just isn't true.
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