Should I Buy Term or Whole Life Insurance?
Ah, the almost age old question, term versus whole life. What is the right thing to do? Forgive me for being more than just a little opinionated on this subject, but personally I think that is a right for anyone that is on the right side of an argument.
Whole life insurance, a cash value building permanent policy is one of the earliest versions of life insurance. Whole life insurance is sold as a savings plan with life insurance, a retirement plan with life insurance, a loan source with life insurance and I'm sure by some, a fountain of youth with life insurance. Whole life insurance is generally sold by life insurance agents that believe that whole life is not just the best way to buy life insurance, but the only way to buy life insurance.
What they don't tell you, primarily because it would end their career, is that whole life insurance is a horrible savings plan, a worse retirement plan, a silly place to borrow money from and unless it is in fact a fountain of youth, it is grossly overpriced. The cash value that does build in a whole policy doesn't magically appear but rather dribbles in as the leftovers from your huge premium payments after the internal and company charges. You get the honor of earning a little bit of interest on the little bit that is left. A good example is a policy my Dad had with New York Life. His parents started it in 1935. It had a $1000 death benefit. Since 1935 the premium payments paid have totaled $1387 and the cash value in the policy is now $723. Now there's some bang for your buck!
Term insurance on the other hand is essentially pure insurance. There is no cash value. No bells. No whistles. Just a guaranteed level premium for a certain period of time (the term) and a guaranteed level death benefit if you die while the policy is in force. Depending on your age you can get guaranteed terms ranging from 10 years up to 30 years.
Term insurance is a small fraction of the price of whole life insurance and really, from a practical standpoint, more appropriate. The truth is that most, and I am thinking that is 95% or more, of life insurance needs are not permanent needs. We carry life insurance because we have a spouse and children who are dependent on our income. Children, theoretically, reach a point where they are no longer dependent on us. That's a need that goes away. Term insurance! Replacing an income for our spouse is a need that should resolve itself at retirement or sooner if our assets outgrow the need for income replacement. That's a need that goes away. Term insurance.
Although I'm surprised it was never offered along with all the other magic mortgages of previous years, there are no life time mortgages, so life insurance for mortgage protection is a need that goes away. Term insurance. Business partners that carry life insurance as a buy/sell agreement aren't likely to still be business partners to age 100 or beyond. That coupled with the fact that most businesses and the associated value to a deceased partner's family change over time makes the need or at least the size of the need a temporary situation. That's a need that changes or goes away. Term insurance.
Bottom line. When there is a product that is available (term insurance) that meets 95% or more of all life insurance needs and you have people selling whole life insurance and they claim that it is the best thing for all needs, a lot of people are left wondering why. It's called compensation. An agent makes a lot more money selling whole life than term. Yes, I'm saying that whole life is a product that is primarily sold for the benefit of the agent.
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If you want Life Insurance, but can't afford the premium for whole life,then you take term life insurance quote.If you interested for this please visit our website: http://www.termlifeinsurance.org/
Term life insurance is most necessary for our life.It is straight forward from normal life insurance.If you interested for this Please visit our website: http://www.termlifeinsurance.org/
It was a beneficial workout for me to go through your webpage. It definitely stretches the limits with the mind when you go through very good info and make an effort to interpret it properly.
http://tritusinsurance.com
Even though Whole Life Insurance often provides a very rosy picture about its many benefits, Term Life Insurance is often the way to go.
Roth IRA
Whole Life Insurance only pays off in extremely rare cases, yet it is considered a viable option because insurance agents make more money selling it.
http://www.buytermlife.com
term life insurance quote
This question depends on your situation and what you need! BuyTermLife.com makes it easy to receive a Term Life Insurance Quote ! Our term life insurance calculator allows you to get an estimated price in just minutes! Best of all, we only sell term life, so you know you can trust http://www.BuyTermLife.com to give you unbiased, excellent choices.
For those that have chronic medical issues, term may not be the way to go, but again as others have said, it depends on the individual, their needs, and other circumstances. If a person has issues (medical or otherwise) that start when they are young and show no signs of abating, Term may not be a good idea. It depends. This is why we, the consumers, have to do some serious homework on this kind of stuff.
As a former financial advisor for the largest bank in the country, you know the one that got a merger approved with the red umbrella insurance company ...
Almost always, term life is the way to go. You usually only need life insurance for a specific term in your life. If you have a minor or someone who depends on you and your income or resources to live. Once your children are grown, assuming that none have disabilities, and that you do not have aged parents that rely on your income or resources, you no longer need life insurance, with rare exceptions. Your money can be put to better use and earm you more interest in something like a ROTH IRA.
The above article is correct....whole life generally benefits the agent more than the purchaser!
If you are deciding whether to get a whole life insurance or term insurance, you should look into your situation... assess your needs. Whatever is your option, look at insurance as something that you will leave behind to your family ... something that will ease them the burden of worry.
That the author of this article clearly has a bias on what kind of insurance is right for you. It also seems that there is mis information about his fathers policy
For starters a whole life policy which is over 70 years would have a guaranteed cash value well in excess of the premiums paid, Perhaps he forgot to admit loans which were taken on the policy for consumption or to keep the policy in force when not paying premiums
It is a zero sum game when the insurance company wins, you loose. Which is why it makes sense to own the least profitable product for the insurance company, and own your insurance with a mutual company where you are an owner of the company entitled to a portion of the divisible surplus.
How many people do you know who own car insurance, or homeowners insurance... how many do you know that have had a total claim on either of these?
How many people do you know who have died?
wouldn't you like your insurance to pay when you die instead of if you die.
Lastly Life insurance is insurance, not a savings vehicle, but if you had maxed out your life policy for each of the last 10 years, you would certainly have all your money you put in... how bout your 401k?
If you were a small business owner and needed a loan today, is it easy to get one? I suppose not... see how easy it is to borrow from your insurance policy.... One phone call, no paper work and a check with days.... oh and you determine how to repay... sounds great to me !
Need a car... Same thing!
By the way when I got married, I promised to take care of my wife for the rest of our lives... that obligation doesn't end at either of our deaths... and I would like to leave a legacy for the university that enabled me to go to school on a scholarship and leave an inheritance to my children and grandchildren.... With Term Insurance I cant do that
With whole life I can... and it not cost me any of my retirement income...
Oh and by the way... I also own a lot of term insurance... which I intend to convert to whole life as I earn more money... I also own mutual funds, investment real estate and cash
Your ideal plan will include alll of these