Does whole life insurance make sense?

Answer 1

There is no simple answer and anyone who attempts to give you one has no idea how life insurance works. There are many types of life insurance but there are two basic kinds - permanent and term.

Term typically guarantees level premiums for a specified time-frame, the "term" of the contract. Term insurance is usually available in 1,5,10,15,20,25, and 30-year timeframes. Depending on your age, some may or may not be available to you. The premiums during the "term" are usually lower per unit (a unit being $1,000 of coverage) than permanent insurance, but at the end of the "term" the premiums typically sky-rocket to 10x or more and continue to increase each and every year thereafter. Most terms do not build any cash value (a living benefit that the owner of the policy - who may be a different person than the insured - may borrow against or cash the policy out for) although some may have premium refund riders that cost additional premium and offer a refund of some portion of the total premiums payed if the insurance lapses or is cancelled.

Permanent insurance includes any contract that is designed to protect the insured for their "whole" life - defined as age 100 or 115 depending on the contract, although all whole life policies define this age as 100. Permanent insurance also includes Universal Life or Variable Universal Life. Most all permanent insurance premiums are higher than their term counterparts, but the premiums typically remain level during the insured's entire lifetime. Permanent insurance also typically builds cash value that grows tax-deferred and may be accessed tax-free in some cases.

The best answer I can give is that it depends on what you want the life insurance to accomplish and how long you need it for as to whether you should get term or permanent. I would suggest contacting a life insurance consultant and having them help you understand what would be best for you. Keep in mind that most life insurance agents are paid on commission and permanent (especially whole life) pays higher commissions than term and this may be motiviation for the agent to recommend permanent over term. If the insurance consultant is fee-based (meaning you pay them a fee for their expertise and they don't necessarily get paid commissions for selling the life insurance) you should be able to trust their advice. Good Luck!!!

Answer 2

In what way are you asking "make sense"? If you wish to cover your life for your family or loved ones, then it makes perfect sense. It is more costly but builds cash value which can be used to fund/pay for the premiums after some time. It should cover all your expenses on behalf of your family. If you wish to cover a large expense - like a home - again it makes sense over the long haul. Should you die before the house is paid off, insurance will make that easier for those you leave behind. If you're covering a temporary loan - a remodel or other material improvement or small business start up expense, I suggest term.

Answer 3

Picking The Right Insurance Program
By: Jim Thio

Answer 4

Try contacting Primerica Financial Services. They will give you a complimentary Financial Needs Analysis. This will show you how much and what kind of insurance you need based on the circumstances that are unique to you. Any insurance agent can sell you insurance, but not all are right for you, will your debt be paid off? Funeral expenses? If you are terminally ill, will the insurance co advance you money from your policy to help you out before you pass? There are a variety of questions to ask. Check out their website, or give them a call, they are in the phone book. Good luck

Answer 5

Rutherian did a great job explaining the differences.

If you are personally seeking insurance, I would recommend seeking the advice of a financial "planner". Typically paid by the hour or for a fee, but they are to give you unbiased advise based on your personal situation.

A financial "advisor" may or may not be paid for the advise given and may be compensated based on what you purchase. This doesn't make them a bad source of information, but there are some bad sales people who can give our industry a bad reputation.

Please, please be weary of anyone who pushes one term specifically or whole life specifically. Seek true education about the products. Each (Term, Whole Life, UL and VUL) has their plusses and minuses. One may fit best for you. Maybe a combination.

Hope this helps... consider this an addendum to Rutherian's post

Answer 6

Of course it make sense. u can pay just 3 to 7 percentage of your income but if u are passed way. u can leave 100 times of income to your family. People can not avoid of accident, young age death and live too long. whole life insurance can make it eeasier for your family if the unpredicted things happen to u. it make sense becoz the insurance companies ve calculate the in 1000 people in, 3 of them will die in a year. so insurance company can make sense pay u.

Answer 7

Whole life insurance is not a good way to invest your money. It doesn't give you much control over flexibility over your investments and probably charges much higher management fees than you can find investing your money on your own. The insurance industry isn't there for your benefit.

Answer 8

IT makes sense for the saleman, he get a big vcommission. Most people dont need it and may not even need any life insurance. INvest you money privately and live

Answer 9

in my opinion, surely not. through the time you retire, will you've collected sufficient resources to cover your household's desires, and could your spouse would have sufficient to proceed to exist very surely for something else of her existence? if so, i do not see any rationalization why you'll desire any further coverage previous the time you retire. a 10-year element time period coverage will be a sensible selection assuming you want to insure hostile by your self lack of existence and the ensuing lack of earnings between now and once you retire. In any journey, I see no logical reason to get an entire existence coverage that builds money fee. this is in ordinary words going to value you more effective than time period, you do not desire the money fee, and the era the position you want the peace of mind danger-free practices is fairly short (from now till your retirement). Assuming you want extra existence coverage in any respect (and also you may not), time period would seem a extra constructive selection.

Answer 10

Yes read some insurance tips on this site