• Life insurance as an investmentlife savings image by Pix by Marti from Fotolia.com
  
  There are myriad ways to invest your money and help it grow for the future, but often the most effective way depends on individual needs and circumstances. Many people opt for life insurance policies as a form of investment because of their security and, in the case of whole life insurance, because the insurance company deals with decision-making, leaving the person who purchased the policy free from dealing with it. As with everything, there are pros and cons to whole life insurance, and it's not the best deal for everyone.
  
  

Types of insurance

• Term life insurance is more of an investment.investment image by Kit Wai Chan from Fotolia.com
  
  There are two main types of life insurance: term life insurance and whole life insurance. Term life insures you for a term from one to 30 years, after that pre-determined term is over, the policy pays out. Term life insurance is used as an investment, often set to cash out once people reach retirement age and may want to pay off a large loan such as a mortgage. Whole life insurance is just that, insurance for a person's whole life, regardless of how long that may be. Whole life exclusively benefits the family members who survive the policyholder and may be used for funeral expenses or outstanding debts.
  
  

Pros and Cons

• There's good a bad in each type of insurance.theatre image by timur1970 from Fotolia.com
  
  A major benefit of whole life insurance is that it guarantees a minimum death benefit, no matter how long the policy is held, as long as the premium is paid. Whole life is also an attractive option because the premiums are at a fixed rate for the duration of the policy. The fixed rate of the premiums is also a drawback to whole life insurance as you cannot increase your premiums or the face amount of the policy. Should the policyholder, over time, decide that he or she desires more coverage, another policy must be taken out.
  
  

Disadvantages

• Whole life insurance offers the policyholder little control.Remember image by Silvia Ottaviano from Fotolia.com
  
  The major disadvantage of whole life insurance is the lack of control of the policyholder. With term life insurance, the policyholder has more control over the money invested; with whole life, the policy is completely in the hands of the insurance agent. Another drawback that goes along with the lack of control of the policyholder is that there are fees involved with having the insurance agent manage the policy in this way. Over time those fees can eat up a significant portion of the premiums. The limited growth potential and hands-off nature of whole life insurance may be an attractive option for someone who is concerned with funding to pay for a funeral or with leaving a small inheritance, but as an investment, whole life insurance is not a good option.