What Kind Of Insurance Should I Purchase Term Or Whole Life?
Posted January 30, 2010 – 4:20 pm in: term life insuranceI suggest that you meet with a licensed financial professional to determine the amount and type of insurance that works best at achieving your GOALS.
No one on a message board can give you an answer unless you want to reveal LOTS of personal information – age, income, savings, debts, dependents, and future plans.
Term insurance works great IF you either die during the term (only 3% of policies ever pay) OR you save enough for all of your current and future debts and expenses (like medical bills) by the time your term insurance runs out. Saving enough is a very rare occurrence these days.
Keep in mind that you CAN own both term and permanent insurance. I do.
Good Luck
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5 Comments
It depends on many factors for your personal situation. Money.aol.com has some good info under their “Personal Finance” section.
If you’re smart, you’ll buy level term for as far out as you can. At the end, assuming you are alive, you will get nothing except satisfaction and peace of mind. But you will have saved a fortune by not buying whole life, which can cost up to 9 times the price of term. The industry pushes whole life because agents make much more commission than in term, thus do not care about their customers needs.
Invest some of the difference between the purchase price of whole life and the price for term, and you will amass much more money than the joke you will be told you’ll get from the cash value of whole life. Unless you borrow some of this whopping 2-3% cash value, that amounts to nothing for 10 years at least, you’ll never see any of it. And if you borrow your own money back, you are charged interest on it, another joke. Whether you live or die, you or your family only get either the face value of the policy, or the cash value, NOT BOTH!!!, yet another joke.
Wow, How does one know what he/she needs? With no information. What about the persons age? What if he/she are in their 20’s or their 70’s? What if this person has no dependents at all? What if this person is wealthy(nah because then a planner would of found you). What I know is that majority of the consumers are better served with term, but I have recognized that whole life is the better product at times.
Your company is not the only company that sells true term insurance. My definition of a true term insurance policy is one where the rates are guaranteed to remain level for the full term period, ie. if it is a 30 year term, then the company can not raised the rates until the full 30 years are up.
For the person that needs insurance. Find a knowledgeable independent agent that will do a free needs analysis for you. They can determine what kind of insurance is best for you.
When choosing between the two Term Insurance wins hands down. The insurance industry always seems to push for whole life or something with a cash value. The truth is that with those policies they talk about build your cash value, but when you die your beneficiary gets the life insurance so who gets the cash value? (hmmm!) There is a company called Primerica that sales true term insurance 100% of the time, because it is what is best for their clients.
Buy a large amount of term and then get a smaller amount of whole/universal. Every situation is different but keep in mind the reason for getting the life insurance to protect your family if you die. So don’t get less life insurance so you can get a whole/universal policy. Look at your situation. example if you have two kids and a house payment and your 25yrs old you will need a lot of coverage until your house is paid for and the kids are on there own. in this case you would need a least a 20 yr term and then look into getting a smaller whole/universal policy this if funded properly will last you your whole life. Leaving your spouse money to pay the final medical and funeral cost. You should by that time have your retirement and the kids will be on there own and the home paid for. Just my recommendation.