Understanding your needs and what you hope to accomplish with your whole life policy will help you determine how much coverage is right for you. For example, if you don’t need the policy to support dependents, a relatively small policy can be sufficient for things like covering the costs of a funeral. If you have more complicated circumstances, or perhaps several dependents to provide for, a larger policy will be in order, but will naturally come with larger premiums.
You should also understand the growth rate and investment return on the policy. While most policies will guarantee a minimum rate of growth, some can also offer dividends to increase the return on your cash value.
Your policy may also include optional riders, which are features you can add to the policy at a certain cost. Riders add benefit provisions to the policy in the form of additional coverage. A few common examples of riders can include:
- Chronic illness – provides early access to benefits for daily living expenses if you become disabled
- Long-term care – provides coverage for long-term needs like a nursing home or at-home nursing assistance
- Accelerated death – offers early access to benefits when diagnosed with terminal illness
A knowledgeable and experienced agent can help you understand the benefits and implications of including optional riders onto your policy.