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Your Financial Life
By Transamerica / Jan 27, 2016

5 Myths About Whole Life Insurance

life insurance myths

When it comes to whole life insurance, there are lots of myths out there. And since it’s the new year, it’s a good time to start thinking about what kind of life insurance is best for you. But sometimes it’s hard to figure out what’s true and what isn’t. Is whole life an investment vehicle? Does it cost more than other kinds of life insurance? These are big questions, however, the answers aren’t necessarily tough ones.

Here are some of the most common myths about whole life insurance:

Whole life insurance is an investment

While it’s true that some life insurance policies have the potential to accumulate cash value, you shouldn’t think of your life insurance policy as an investment. Whole life insurance policies are meant to help provide for your family and your dependents when you pass away. Any money that you withdraw from your policy is money you’re potentially taking away from your family in the future.

Whole life premiums are higher than term life insurance

You may have heard that whole life insurance premiums are more than term life, but that isn’t always the case. No matter what kind of life insurance you choose, your premium will be determined by many factors like your age, health, and how much insurance you need to protect your loved ones.

Benefits only kick in after the insured passes away

Some benefits from your whole life insurance policy can help provide financial relief even before you pass away. Depending on which riders you have or the terms of your policy, you may be able to access your benefits if you become chronically or terminally ill. However, remember that accessing these accelerated benefits will reduce the amount of your beneficiaries’ final payout

You can’t have both whole and term life insurance

When you’re choosing which type of life insurance to get, you don’t have to limit your options. For example, some people may get term life insurance with their benefits at work, but it only provides protection while you are employed. In these cases, it’s not unusual for someone to get a whole life insurance policy independently as well.

You don’t need a medical exam

Whether or not you’ll need to get a medical exam is not always the same among policies. Some will require you to have a medical exam to help determine what your premium will be. However, some won’t, but that’s not limited to whole life insurance; it depends on the specific policy you’re looking to get.

If there are still some myths you’d like to get clarification about, we’d be happy to help you!