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Is a Life Insurance Investment Worth It?

Everyone buys life insurance with different goals in mind. Mapping out these goals ahead of time can help you narrow down which type of life insurance is right for you and which benefits you are looking for.

If you are hoping to establish financial security for your loved ones after you pass, investing in some type of life insurance is worth it. You can also support your living financial goals with a life insurance investment – these policies are not just limited to protecting your family after you're gone. Read on to learn how life insurance works and whether getting a policy is a good investment for you and your loved ones.

Types of Life Insurance Investments

Each type of life insurance policy works differently, but we offer Aflac® Life Solutions – Term and Whole Life plans.

Term Life Insurance

With term life insurance plans, the policyholder pays regular premiums to keep the policy active for a set time frame, like 10, 20, or 30 years. If the policyholder passes during the term, the beneficiary will receive the death benefit. If not, the policy will expire.1 In some cases, you may be able to extend your life insurance term a few years out. We recommend chatting with an agent to see if this is a possibility.

In general, term life insurance is a life insurance investment that benefits your family after you pass. If you were to pass within the term, the death benefit would secure your loved ones an inflow of money. This may be helpful if they were depending on you financially. On the other hand, whole life insurance may be able to offer additional benefits for the policyholder to tap into while they are alive too.

Permanent Life Insurance

Permanent life insurance is a type of policy that lasts the entire life of the policyholder. Aflac’s whole life insurance provides whole life coverage and offers the policyholder the ability to accumulate cash value in a tax-deferred account.2

In some cases, you may be able to borrow against this value in the form of a loan. This value grows at a higher rate because taxes aren’t taken out, giving you greater borrowing potential.3

In other cases, you can invest your cash value into different kinds of funds and indexes of your choosing. These options are found in indexed and variable universal life insurance plans.4 These options are not available at Aflac, but the cash value offered in our whole life insurance plans still has many benefits.

At Aflac, you may be able to explore taking out a loan or a partial withdrawal from the cash value in an emergency.

Is a Life Insurance Policy Worth It?

Getting a life insurance policy can be a good investment if you’re looking to provide security for your family or you expect large expenses later on. Compare types of polices and the coverage they offer to decide whether life insurance is worth it for you.

If you choose a term life insurance policy, you can save money upfront and grant your family a death benefit if you pass within the term. If you choose to go with a permanent plan like whole life insurance, you can borrow against the cash value in the form of a loan for substantial expenses, like going back to school or buying a new home.

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Pros and Cons of a Life Insurance Investment

Here are some pros and cons of life insurance so you can decide whether investing in a policy is worth it:

Pros of Life Insurance:

  • If a main financial provider passes, the death benefit can act as a stream of income. This can be particularly appealing if you have dependents that rely on you.
  • Life insurance can assist with end-of-life costs and some burial expenses, helping alleviate stress for loved ones.
  • The cash value in whole life plans may be accessed in the form of a loan or partial withdrawal. This can be useful if you need help paying for a large expense, like a mortgage or a college education.
  • Accelerated benefits help pay for medical bills if the policyholder was diagnosed with a life-threatening illness, like a heart attack or stroke.5

Cons of Life Insurance:

  • Some plans can be pricier than others. Term life insurance is typically less expensive than whole life insurance, but it does not offer cash value, a benefit of whole life insurance.
  • If you don’t choose the right type of life insurance policy, you may end up getting more coverage than you need and paying more for premiums. Clarifying whether you need permanent life insurance coverage or not can help prevent this from happening.6

Get a Quote for Aflac Life Insurance

If these benefits sound appealing to you, we recommend chatting with an agent and learning about your life insurance investment options. Our plans are portable, and you may be able to convert an existing term life insurance policy to a permanent one.

Providing peace of mind for your family may be the only benefit you need, but we may be able to help if you have other financial goals in mind.

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