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A liquidating dividend occurs

Whole life insurance provides a guaranteed death benefit that is PROJECTED (but not guaranteed) to grow slowly so that if you die at your life expectancy or later you’ll leave behind a little more than the original policy death benefit.

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A whole life policy would be devastated by unexpected inflation, since the dividends are backed primarily by nominal bonds, whose values would be murdered in a high inflation environment.That sounds great, almost like an inflation protection of the death benefit.Except historical inflation is something like 3.1%.Therefore whole life insurance is neither the best way to provide a guaranteed life-long nominal death benefit, nor a guaranteed life-long real death benefit. How about a guaranteed death benefit that might increase if the insurance company feels like increasing it?Would you be willing to pay premiums that are twice as high for that? Myth # 3 Whole Life Provides A Great Investment Return Whole life isn’t the best way to invest, traditional investments are.When you pay your whole life premiums part of the money goes toward buying insurance, part of it goes toward overhead and profit for the insurance company, and part of it goes toward the commission for the salesman.

The rest then goes into the cash value portion of the policy.

Before you retire, you can purchase inexpensive term life insurance to take care of your loved ones in the event of your untimely death.

A 30 year level premium term life insurance policy with a $1 Million face value bought on a healthy 30 year old runs $680 per year.

This product can be set up in many different ways, but in general you pay a monthly or annual premium for either a defined period of time, or until you die.

The longer the period of time over which you pay the premiums, the lower the premiums.

There are more than 400,000 insurance agents in this country, and almost all of them would love to sell you a whole life insurance policy.