Is Your Florida Whole Life Insurance Policy Still a Good Investment?

Florida whole life insurance is very popular because it builds cash value as policyholders pay their premiums. However, these consumers often want to know exactly how much cash their policies will generate over time; this is known as a rate of return. Here, we have provided some helpful information for determining the rate of return on a whole life insurance policy.

Obtaining a Projection

In order to figure out how much your policy will yield over a period of time, insurance agents will typically come up with what is known as an internal return rate, or IRR. They come to this figure by calculating how much your policy is expected to grow each year, and this rate can change dramatically based upon the length of time that your policy has been in place. If this rate is too low, you’ll know that it’s time to shop for a new policy elsewhere. However, it should be noted that determining the amount of money a policy will yield is quite difficult.

Insurance Illustrations

When you receive a Florida whole life insurance projection from your agent, there are several things that this should include. You should be able to review things like the cost of the policy, how much you have paid in the form of premiums, the death benefit and the amount of cash the policy would generate if you surrendered it. You should be able to view this information currently and for five, ten, and even 20 years down the line, as well. However, these projections are often complicated and contain terms and slang that are difficult to understand. It is often wise to ask a lawyer to review the documents for any loopholes that may be bothersome.

Understand the Policy's Performance

All in all, a Florida whole life insurance policy is designed to be a long-term investment in your future. You should never purchase this sort of insurance in hopes of making quick money. However, in order to get the most from your policy, you will need to take a look at how the policy is expected to perform over the next 30 years or so if you are buying a new policy. If you already own a policy, you should look at the expected performance over the next five to 10 years. This will tell you how much you can expect to earn and whether or not the policy is a good investment. In many cases, consumers will hire third party insurance analysts to help them compare policies in this way.

If you are wondering whether or not your Florida while life insurance policy is still a good investment, you will need to speak to your insurance agent in order to obtain a projection. After receiving this information, you can better decide if switching insurance companies or policies is the best choice for your individual needs.