How Much is Your Whole Life Insurance Contract Really Costing You?

Continuing from this earlier post, what is the real cost of whole life insurance?  Did you know that a typical whole life insurance hypothetical does not even show the cost of the underlying insurance? Did you know that most people only receive access to the cost after their policy is issued? Did you know that most people don't actually take the time to review their life insurance contract or make the necessary calculations to discover the cost? Is it ethical to issue an insurance policy before you even know how much the insurance will cost?  Which of the following is the separate account in a whole life insurance policy really for?

• A. To allow you to be the bank to create wealth or
• B. To allow the whole life insurance company to draw from the separate account when the cost of insurance becomes so high that you can't afford the premiums?

Contracts can be difficult.  Thanks for reading and come back to find out more questions people should be asking before obtaining a life insurance policy.  For more information, visit www.smartmoney.com.

This post was reposted from http://finlit.biz/life-insurance/how-much-is-your-whole-life-insurance-contract-really-costing-you/, originally written on January 21st, 2013.