which is better term or whole life insurence?

Answer 1

Term of course. Actually, term and investing the difference is the best way to protect the family. Would you rather give your family the right amount of coverage when you pass away or just give them what you can afford? With term you can afford the right amount of protection because its inexpensive to buy. Therefore, you have more flexibility on where to put your savings.

With whole life, you can only afford a certain amount of coverage because its so expensive to buy because whole life bundles insurance and savings together, which makes no sense. If your car insurance, health insurance, homeowner insurance don't have a savings plan in it, why should your life insurance have it? After all, insurance is to protect your assets in case something happens, not as a way to build your savings. If you want to build your savings, you are better off putting money in the bank or investing into IRAs.

Answer 2

1

Answer 3

It depends on your situation. Whole life is much more expensive than term. At the end of the tern yu are left with nothing but while you grow old it gives yu and your family protection which yu need if yu are young and have a family to worry about and do not have much assets. On the other hand whole life yu can cash in after the time. The insurance co. will say that if you pay this amount for a set # of yrs. you are good and no need to pay after that. What I have seen is that ins. companies, after the said time came back to say, the market was down or did not perform as well as they thought and interest rate wasdown and it did not reach the amount they expected, so you as a policy holder have to continue paying the premium for lot more yrs. So now you figure what is best for you. But one thing, if yu plan to take either a term or whole life, take it as early as yu can because the rate will be cheaper when you are young.

Answer 4

There's differing opinions on this. Term is cheaper, but as the name applies, it is for a set number of years. You can't renew it when it expires, and you may not be able to get inexpensive replacement at an older age. Whole life doesn't expire until you do, but is more expensive to start. Some agents will try to sell you on the cash value, but you shouldn't consider that. The return is so small, you could do better just by putting you money in a regular savings account.

Most people will buy term to help their family pay off large expenses like a mortgage. When the policy runs out, the house should have little to no mortgage left. They supplement the term policy with a whole life policy to continue on the rest of their life.

Answer 5

That all depends on which is better for the person purchasing the insurance.

There are also a couple of other options available besides term and whole life, including universal and variable.

Term life is relatively cheap and tends to be a good fit for people looking to replace income during the prime earning years. (Take a calculator and multiply your current salary times the number of years you plan to work. That's the amount of income your family would be missing out on if something happened to you this year. Actually, it's a conservative estimate, because it doesn't even factor in raises, etc.) The biggest drawback to term insurance is that it will eventually go away. When the term runs out, it runs out. Most companies will give you the opportunity to convert some or all of the coverage amount to whole life at that point and while there will likely not be any need for evidence of insurability (meaning that you probably won't have to reapply, answer medical questions, or have a medical exam) your rates WILL be based on your age at that time. (And you can bet the rates will be significantly higher than if you'd purchased it earlier.)

This is why I usually recommend at least a small whole life policy to cover final expenses in combination with the term life policy. Whole life insurance is designed to cover you until age 100. People talk about the fact that whole life builds cash value and it does. You can borrow against it, if you need to.

There are two types of whole life, though: participating and non-participating. For the non-participating type, it will NEVER be worth more than the face amount. Period. The participating type takes the cash value that builds up over years and when the cash value becomes worth more than the face amount, the cash value is used to buy paid-up insurance. This type of policy still won't pay out the "cash value"; however, the policy will become worth more than the face amount once it goes beyond a certain point.

Universal and variable are different animals entirely. Universal can be used similar to a term policy that, effectively, never ends. In other words, it won't really build cash value (at least, not after the first few years), but it will provide insurance to age 120 (or even longer, depending on the contract.) And because it's a universal product, you have more options about how it's paid. For instance, I usually set these up for my clients so that they stop paying for them at age 65, based on the idea that this is the age they will typically be preparing to retire and have less income with which to pay. The premium they pay till age 65, in that case, is usually only slightly higher than someone who was scheduled to pay through age 100, but they aren't saddled with that ongoing responsibility (and yes, the policy remains in force.)

Variable life requires a different type of license to sell because it's not a guaranteed value that it will pay out. These are typically purchased more for an investment than as true life insurance. And frankly, I think you could do better with other types of investments and not have to worry that your life insurance might run out of money (yes, even if you've been paying into it consistantly) about the time you need it most.

Answer 6

Term is the best type of income protection. We like to call it "life" insurance, but it does not bring somebody back to life. It should only be used to continue an income that is no longer available due to someones premature death. The general population needs to think about becoming self-insured. You need to get out of debt and have money for a comfortable retirement in order to do that. I work with a company that shows middle income families how to do that. What an amazing company to work for!

Anyway, the cash value or whole life insurance is not a good investment. You do have the income protection plus you have a savings account, but when someone dies, the income protection is given to the survivors and the savings portion goes to the insurance company. Sad but true, but that is what most policies say. Read your policy! I know it is boring, but do it. You could be paying for something that is not good for you in the long run.

Answer 7

you may take out existence coverage once you're youthful when you consider which you ought to get it on the perfect attainable fee mutually as being in the perfect attainable wellbeing. As you become older it is going to become costlier to purchase and each so often you're actually unable to get insured when you consider which you are able to no longer be extra healthful. once you purchase existence coverage you may evaluate finding out to purchase term existence coverage. it extremely is the main inexpensive coverage attainable. It in basic terms pays out upon your loss of life and has no saving geared up into the top classification. The top classification will strengthen each and every 3 hundred and sixty 5 days, yet because of the fact it starts off at an very low fee even once you attain midsection age it continues to be extra less expensive than different varieties of existence coverage. the each year top classification for $one million,000,000 of cover for somebody 25 years of age next birthday could be approximately $765. by how, yet another sort of coverage you additionally should contemplate very heavily, is disease and twist of destiny coverage. this saves your earnings once you're actually unable to paintings as a results of a disease or twist of destiny.

Answer 8

A simple way to look at it:

Term - used to cover major debts and household expenses for your surviving family so they will have a paid up house and living expenses as long as needed. Also used to provide for college etc in the event of an early demise.

Perm - used to cover final expenses and to leave tax-free money to heirs.

Answer 9

Several months ago I was confronted with this very question. After extensive research in speaking with friends, relatives and mostly on the internet, I reached the following conclusion:

A combination of term and whole life that fully insured my life and the life of my husband and which fit into our long-range budget would be the best way for us to go.
For this to fit into our long-range budget it was very important for us to guarantee a fixed cost throughout the life of this plan and that this plan must last a lifetime.

In using fixed cost throughout our lifetime it is guaranteed that the annual premium we pay in Real Dollar Terms will decline over time. This is true because $1 spent today (fixed each year) will be less spent in the future due to inflation.

Not just any term or whole life will work for our budget plan to work. On the term side we needed guaranteed level premiums for an extended period of time. On the whole life side it was very important that we receive a good return on the money directed into the whole life policy without undue risk.

The traditional pure whole life plans will not work for us because the annual premiums are a budget buster (I do not want term built into the whole life because the term cost when built in is not fixed - we looked at Northwestern and Mass Mutual).

Variable life where the cash value is invested in mutual funds within the policy is too risky for us and contains many more fees (Two friends of mine had this kind of policy and it feel apart during the bad stock market period a few years ago). A Life insurance plan should not fall apart because of the stock market or from low interest rates. It must be there though all conditions.

Universal life also called whole life or permanent by some, is neither for your whole life or is permanent life. Are you aware that these policies may fall apart just when you need it most. Near your normal death age. This may happen in a low interest rate period. It's very important that you get the lifetime guarantee rider attached to these policies to guarantee that they last your lifetime.

So what did we decide on after all this?

We purchased a 30 Year guaranteed level term policy for 60% of the $1,500,000 of life insurance we each needed ($900,000). We could have gone with the 20 Year, but we wanted to make sure we had this coverage in place to near age 70 because we expect to work in some career beyond age 62 or 65. Also, if you buy the 20 Year and you find that in 20 years you need to buy new coverage, any negative health condition will bump you into paying a very high premium even for term insurance. A risk we do not want to take.

For 40% of the $1,500,000 ($600,000) we purchased EIUL or what is called Equity Index Life Insurance.

We looked at this three ways.

1. Minimum premiums paid for life to guarantee the death benefit for our lifetime or age 120 whichever is longer. Note: this cost is fixed and will never increase.

2. A higher premium paid to age 65 (Policy is guaranteed and fully paid off) to guarantee the death benefit for our lifetime or age 120 whichever is longer. Note: this cost is fixed and will never increase.

3. An even higher premium paid to age 65 with the sole purpose of driving the death benefit upward over our lifetime. (Policy is guaranteed and fully paid off) to guarantee this increasing death benefit for our lifetime or age 120 whichever is longer. Note: this cost is fixed and will never increase.

Why EIUL or what is called Equity Index Life Insurance? Because the interest we earn on the cash value in the policy is based on stock market indexes. The neat thing here is that you have no risk of market losses you only share in the gains. Your cash value only goes higher and never ever down due to the stock market index.

We purchased # 3 and we used an internet service to make our purchases. This particular service is actually owned by a very experience CLU, ChFC and he worked very hard to help us find the very best solution and the very best deals for us. We made the final decision and we made it at our pace. No pressure at all. Just an unusually great experience in buying life insurance.

You may not need $1.500,000 of insurance each like we did and your split between 30 Year level term and EIUL may not be 60% / 40%. Just know that I did all of this research for the both of us and I can highly recommend that this solution will work for you as well. This is where I ultimately found this specific solution (I tried many places first) and we made our purchase here. http://www.joesalvemini.com/life_insurance_quote

I hope my research, what I went through and my recommendation helps you save a ton of money just like my husband and I did. Remember a long range fixed cost over life is the very best way to meet your life insurance needs. This is true because $1 spent today (fixed each year) will be less spent in the future due to inflation.

Get this right the first time and enjoy your life!

Rich Kathryn

Answer 10

Depends on what you want it to do for you. They each fill needs, it's YOUR job to figure out what you want it to do for you.

*I* buy term for me & my husband.