When you buy a whole life insurance policy, you get lifetime protection. There are certain things for which paying is inevitable, whether it’s your children’s education, marriage, or retirement. However, not everyone secures their future, mainly because of the various myths surrounding whole life insurance.
There are several misconceptions regarding whole life insurance, which makes people hesitant while thinking of buying an insurance plan. Life insurance can be classified into two types, term and permanent. Whole life insurance comes under the umbrella of permanent life insurance. This means each year, a portion of our income is deducted and added to the insurance account, where the money multiples tax-deferred.
But the entire concept is a little complex, which is why many people fail to understand its true potential and various benefits. This blog will debunk some myths about whole life insurance plans so you can plan for your family stress-free.
Myth # 1: Whole Life Insurance is a Good Financial Investment
Reality: Primary Reason to Buy Whole Life Insurance is the Death Benefit Payout
Most insurance agents describe whole life insurance as a valuable financial investment that will diversify your portfolio. However, the reality is that while life insurance is brought primarily due to the death benefit payout, your beneficiaries will get after you die. While it is a lucrative investment, the foremost reason to buy a whole life insurance plan is to gain the death benefit.
As mentioned above, once you buy an insurance plan, half a portion of your premium goes to the death benefit account, and the rest goes into the cash account, where the value multiples over time. The main thing is that before you buy any insurance plan, you need to understand and evaluate the risks and costs carefully.
Myth # 2: You Only Get Whole Life Insurance Payout When a Person Dies
Reality: You Can Get Payout Before the Insured Person Dies
Most people assume that they can only access the money after the insured person dies, but that’s far from true. You can access the money even while the insured person is alive. Certain life insurance policies include the accelerated death benefit. This means that if the insured person is suffering from terminal or chronic illness, they can withdraw some or all of the payout from the death benefit fund.
Then after they die, the remaining payout will be given to the beneficiaries after deducting the amount used earlier.
Myth # 3: You Don’t Have to Worry About a Medical Exam
Reality: Only Some Policies Don’t Require You to Take a Medical Exam
Indeed, these policies are called simplified-issue or guaranteed-issue whole life policies and are often targeted at people over fifty for final expenses. But the payouts are relatively smaller, and if you die early, your beneficiaries won’t even get the whole payout.
Reliable Life Insurance Services in Houston, Texas
If you’re looking for life insurance companies in Houston, Texas, Franklin Life and Annuity is the best option. We offer clients one of the finest family insurance services and continuous customer support. We are committed to helping Texans safeguard their burial funds with our reliable burial and final expense insurance services.
Get in touch with us today to book an appointment. You can also visit our website right here.