While whole life policies can be a relatively pricey way to obtain insurance coverage, there are some people who may be more inclined towards such policies. I will always point out the alternative strategy of buying term and investing the rest, highlighting the pros and cons of both strategies. A small allocation to a whole life policy and heavier emphasis on term coverage can often be a good way to deal with one’s insurance coverage.

A good trend that is occurring with whole life policies is the provision of a minimum coverage amount typically called Minimum Protection Value (MPV). A whole life policy may offer a sum assured of $X which gradually increases over the years as the insurer declares bonuses that add onto the sum assured. An MPV seeks to increase the amount by a certain factor for a specified number of years. For instance, it can double $X…