As deposit interest rates continue to decline, many people have chosen to move their savings, that is, take the money they have in the bank out and put it somewhere else. For example, using it to buy insurance with value-added effects is a good choice.
When talking about insurance with value-added function, we have to talk about increasing whole life insurance and pension annuity insurance. These two types of insurance with value-added function are also the two types of insurance with relatively high market recognition.
So, what is the difference between increasing whole life insurance and pension annuity insurance? How should we choose?
Photo Network_500602237_Deposit money (for business use)
1. What is the difference between increasing whole life insurance and pension annuity insurance?
Let’s first talk about what increasing term life insurance is.
In simple terms, increasing whole life insurance is life insurance that provides lifetime coverage and whose insured amount and cash value can increase year by year.
Now let’s talk about what pension annuity insurance is.
Pension annuity insurance is somewhat similar to the social security pension we pay. That is, after paying a certain number of premiums according to the number of years, the insured can start receiving a pension from the agreed retirement age ( such as 50 or 60 years old ) . The pension can be received monthly, annually, or in a lump sum, and can be received for the number of years specified in the contract, making one’s later life more abundant.
2. How to choose between increasing whole life insurance and pension annuity insurance?
1. If you want high flexibility, give priority to increasing whole life insurance
The cash value of increasing whole life insurance increases at a fixed interest rate. When the cash value exceeds the paid premium, you can reduce or cancel the policy if you need money, which is more flexible. However, pension annuity insurance usually does not support reduction of insurance and must be withdrawn at the age specified in the contract, which is less flexible.
2. If you value the pension function and want a continuous and stable cash flow, choose pension annuity insurance
If you value the pension function and hope to have a guaranteed amount of money to receive when you retire, it would be better to choose pension annuity insurance, because pension annuity insurance can provide a continuous and stable cash flow, usually until you live and get it.
3. Final Thoughts
Generally speaking, increasing whole life insurance and pension annuity insurance have different functions. If you pay more attention to pension planning, pension annuity insurance is better than increasing whole life insurance, which can provide a steady stream of cash flow. If you pay more attention to the flexibility of withdrawal, then increasing whole life insurance is better.
