what is the difference between whole and term life insurance? what is a unit?

Answer 1

Term life insurance is protection guaranteed you for a specific number of years, as long as you pay your premium.

The most common type of term insurance is level term. Example of Level Term: 20 Year Level Term insurance provides you with a death benefit that stays the same for 20 years, and premiums that stay the same for 20 years. If you die during the 20 year policy period your beneficiary will receive your death benefit. If you outlive your policy, your policy expires and you have no coverage. You can choose to renew your policy but you will pay higher premiums at that time based on your age. Some term policies have a conversion privilege. This allows you to convert your term policy to whole life insurance. Usually a conversion privilege is only available for a certain number of years. But, this does allow you to get lifetime protection, and not have to worry about becoming uninsurable - not being able to buy life insurance when you are older or ill.

Term insurance is "pure protection". There is no cash value that builds within the policy. That's why it is cheaper. Term insurance usually offers the maximum coverage for the lowest rates. Especially when you are younger. Term insurance is used to provide coverage for a specific number of years - usually 1, 5, 10, 15, 20 or 30 years. Many families use term insruance to provide protection for specific, temporary needs like college tuition, home mortgage, car loans, and short to medium term debt and financial obligations.

When your term insurance policy expires, you may or may not qualify for another policy, so make sure to ask about renewability of your policy and conversion privileges before you buy. And, always compare several quotes for the same type of policy.

Whole life insurance offers you lifetime protection as long as you pay your premiums. Whole life builds cash value within the policy. You may be able to take a loan from the cash value. Whole life insurance cannot be canceled at any time do to your health or occupation. Just make sure the premiums are paid.

Whole life may be more affordable compared to term insurance when you are older.

A "unit" of life insurance refers to a specific amount of protection, such as, $1,000. So, if you owned 10 units of life insurance, you would have $10,000 of life insurance protection.

Many mail order life insurance companies offer you mailers that refer to "units" of protection. They do this to make the coverage appear more affordable. They'll say something like "Each unit is only $2.49 per month." So, instead of thinking how much the actual amount you need costs, your thinking, oh, it's only $2.49 a month per unit. If you really need $20,000 of coverage, that's almost $50 per month and may be much more expensive than other options you have. Don't be fooled by this advertising approach.

Always compare quotes and understand your policy before you buy. You can request a copy of the policy to be sent to you for review before you make a purchase. Take the time to understand your coverage and obligations before buying your policy.

To learn more about life insurance go to http://www.term-life-online.com

Answer 2

Whole life insurance is a policy that doesn't expire, as long as you pay the set premium. If the premium is $1,000 a year when you're 20, it's also $1,000 a year when you're 70. It's the most expensive way to buy insurance.

Term life insurance is a policy that insures you for a term (10 years, 15 years, 20 years) then expires, and you have to reapply. If you pay $100 a year when you're 20, you'll pay $100 the year you're 40, but when you turn 41, it will probably be $600 a year. And when you're 70, $10,000 a year. Term is the most economical way to buy insurance.

A "unit" is usually $1,000 of coverage. So if you want a $100,000 policy, you need 100 units. It's usually only used in those "buy whole life insurance from us!" mail fliers like Gerber & Protective Life. If you're thinking about doing that, PLEASE get competitive quotes for other policies, both term and whole, so you know what you're getting into.

Answer 3

I took a course on life insurance. A unit means one thousandth of a coverage. For example, if a person is seeking $250,000 in coverage, you divide that by 1000 and you will get 250 units.

Whole life insurance provides coverage up to age 98. It includes a saving plan with it, so your premiums will be higher if you were to buy just term insurance. With the savings, you can either borrow it after the first 3 years or let it grow. When you die, your beneficiary will only get the face amount less any miss premiums less any money borrowed from the savings. All savings in the policy will be kept by the insurance company upon your death. (If you don't believe me, you can find this statement in every whole life policy).

Term insurance offers protections for a period of time. Anywhere from 10 to 30 years. Premiums are generally lower than cash value policies. There is no savings included with it, so people should invest it into IRA/Roth IRA, or into their 401k plan. Overtime, your investments will grow and you probably won't need life insurance anymore or as much coverage.

Answer 4

No one on this message board can give you the answer to what type and amount of insurance is best for you unless you want to post all of your personal financial information - income, savings, goals, debts, # of dependents, age & health.

Go talk to a licensed insurance professional about your insurance needs. Talk to as many as you need to before you become comfortable. If the insurance pro does NOT ask about your income debts etc, then walk away.

There are huge differences in term versus permanent insurance. 98 percent of the term policies never pay a claim because the owner either outlives the term or the owner lets the policy lapse by not paying the premium. Term works well as long as you plan on dieing during the term or accumulating enough savings that your death won't impact those around you financially.

Permanent insurance pays a death benefit to a beneficiary when he/she dies regardless of age as long as the premium are paid.

Talk to a licensed insurance pro.

Answer 5

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RE :What is the difference between whole and term life insurance? what is a unit?
Follow 8 answers

Answer 6

Term life policies offer death benefits only, so if you die you win (so to speak). If you live, you (or more specifically, your family) get no money back.
Permanent life policies offer death benefits and a "savings account" (also called "cash value" or sometimes, "account value") so that if you live, you usually get at least some of, and often much more than, the amount you spent on your premium. You get this money back either by cashing in the policy or by borrowing against it.

Hope this helps :)

Answer 7

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Answer 8

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