Is it better to buy term life insurance or permanent life insurance?

Answer 1

Term insurance because it cost less and you decide where you want to save your money. I wouldn't let any insurance company decide what to do with my money. I only need insurance to manage my risk against financial loss.

Answer 2

Are you looking for a way to replace your income and protect your family’s lifestyle in case you die? If so, then term life insurance is probably best. It is a safety net for your family. It is certainly the lease expensive option. However, they money you pay into term life insurance is gone forever, unless you happen to die during the period of coverage. If you would rather use your money to insure your life and build some kind of savings at the same time, then consider whole life insurance. A whole life plan will build cash value over time.

It is true that there are other, more lucrative investment options, but they do not have a guaranteed return. Those that do offer guarantee payment do not earn very much either. Critics of whole life encourage you to use your premium savings and invest them, but you have to be honest with yourself: Will you really do it? A whole life policy is an easy way to invest: You just pay the premium. Another plus is that the earnings from a whole life policy are tax-deferred (and the death benefit is tax-free). And what kind of investing can you do with such a small amount each a month, anyway? For more information about the pros and cons of term and whole life insurance, check out: http://www.lifeinsurancewiz.com

Answer 3

Both have good and bad points. Term insurance is usually cheaper, but does not build up a cash value, and ends at the specified time. hole life, as you pay into it, builds an actual cash value, which you can "borrow" against and then repay,like a loan from yourself. It also never goes away during your lifetime. On the other hand, it is more expensive than term insurance. It boils down to what your immediat, and long term needs are. I personally have a term policy and a whole life policy.

Answer 4

Term, term, term. With whole life, you pay a huge upfront commission to the salesman, then he/she gets a piece of your yearly renewal forever. Go to Selectquotes and get prices for term of your desired coverage, then invest the difference in cost. Over the long run you have insurance plus a nice portfolio. Do you really need insurance? If you don't have kids, maybe you don't. Just invest it all in an index fund.

Answer 5

by term insurance. whole life insurance is not in the best interest of the consumer. it is a product that makes insurance companies a lot of money and that is why they sell it. below is a link to a company that only sells term insurance because they believe in doing what is right for the consumer.

whole life, universal life, and variable life insurance is sold on the premise that you can save build a retirement or savings account along with it. the thing is you don't need insurance for life. life insurance is basically income protection. in the event that you die you can no longer provide income for your family. that is when the life insurance policy steps in and gives you money to help your family out. when you retire you no longer need a job to support your family. your retirement account takes care of you and your family whether you are alive or not. you only need life insurance while you are in debt and have little money saved up for retirement. once you're older, your kids have moved out, you're out of debt, and you have plenty of money socked away you don't need life insurance anymore. this is what is good about term. it cost less and you can get rid of it when you don't need it without affecting your investments/savings.

Answer 6

Couldn't tell ya seeing as how I don't know anything about you or your situation. That's like asking a random doctor "is Lipitor or Zetia better?" Generic advice is only good in generic situations.

Answer 7

talk to a broker that deals in all ins.

Answer 8

Depends on the GOAL. What's the GOAL??

Answer 9

Here is a complete overview:

Term life insurance is designed to help people buy life insurance protection they need when they can't afford to purchase all permanent insurance, or when they only need life insurance protection for a specific period of time. Term insurance provides you with a guaranteed death benefit, but no cash value.

The life insurance premiums will increase at pre-determined intervals such as 1 year, 5 years, 10 years or 20 years. This depends on the type of term life policy you select. A term life policy is often the choice when your life insurance protection needs are higher for a period of time, then drop down to lower levels in later years, such as when your family is growing.

Term insurance can also be an effective way to provide supplemental coverage in addition to permanent insurance during years you need higher levels of protection, such as when your family and other financial responsibilities are beyond your current income.

In these situations, term coverage allows you to purchase important death benefit protection without going beyond your budget. Also, if the coverage is convertible (the coverage can be "converted" to a comparable permanent life insurance policy, without the need to provide evidence of insurability), you can get the coverage you need today — with the ability to purchase permanent insurance coverage in the future. Get a Free Term Life Insurance Quote.

The Real Cost of Term Life Insurance

However, term insurance has its disadvantages. It isn’t right under all circumstances. Among its drawbacks, be sure to note the following:

You do have to "die to be paid." As unpleasant as that sounds, it's true. Term life insurance provides a death benefit only, for a specific period of time. So, if you outlive your policy period, there is no payout to your beneficiaries. When the term coverage expires, your protection ends, too. And, if you stop paying your life insurance premiums, the coverage ends. Period.

Here’s an example for you - Let's say you own a $250,000 term life insurance policy. You've kept the coverage in force for twenty years, and the policy expires at midnight on June 30. If you die at 11:59 p.m. on June 30, your beneficiary receives the full $250,000 in death benefit proceeds. However, if you die at 12:01 a.m. on July 1, your beneficiary receives nothing under the term insurance policy, since the policy has expired.

Purchasing term insurance is often compared to renting an apartment. When you rent, you get the full and immediate use of the apartment and all that goes with it, but only for as long as you continue paying your rent. As soon as your lease expires, you must leave your apartment. Even if you rented the apartment for 10 years, you have no "equity" or cash value that belongs to you.

There is the Very Real Risk of becoming uninsurable when the term insurance coverage expires. While many term policies are convertible to permanent insurance coverage, others may not be. And, even if the term policy is convertible, there are time limits. If the policy is allowed to expire, you may be required to re-apply for life insurance coverage, and prove insurability by taking a medical exam. If you are found to be uninsurable at that time, you will be without life insurance coverage.

Since premiums increase at each renewal, the long-term cost of term can be very costly. Many people buy term insurance coverage when they are in their 20s or 30s because it appears more affordable when compared to a cash value or permanent life insurance policy with the same death benefit amount. By the time they're in their 40s or 50s, the coverage seems a little more expensive, as the rate goes up. In their 50s, the cost may be comparable to the cost of permanent coverage. Finally, in their 60s, if not sooner, they may decide to drop the policy — not because they no longer need the protection, but because they usually can't afford it. However, the person who paid more for a permanent life insurance policy in their 20s may still be paying the same premium. That's why the term policy's conversion privilege is so important. This valuable feature is usually available in the first few years of the policy, and allows you to convert to permanent insurance without submitting evidence of insurability. Converting to a permanent policy lets you "lock in" a fixed premium, and your life insurance coverage can never be canceled, provided you pay your life insurance premiums.

The Value of Permanent Life Insurance

Cash value or Permanent life insurance is often the best long term solution for many people. The reasons:

Permanent life insurance provides you with lifetime insurance protection, provided you pay your premiums. Usually, once you’ve been approved for coverage, your policy cannot be canceled by the insurer. Regardless of your health, the insurance will remain in force.

Despite higher initial premiums, permanent life insurance can be less expensive than term life insurance in the long run. Many permanent life insurance policies are eligible for dividends, which are not guaranteed, if and when they are declared by the insurance company. Many companies offer the option to apply current and accumulated dividend values towards payment of all or part of your life insurance premiums. If dividend values are sufficient, out-of-pocket premium payments may be reduced after several years, yet coverage continues for your entire life. So, while life insurance premiums must be paid under both, the permanent and term life insurance plans, long-term out-of-pocket cost of permanent insurance may be lower compared to the total cost for a term life insurance policy.

Permanent insurance can eliminate the potential problem of future insurability. Cash value life insurance policies do not expire after a certain period of time. And, some policies contain guaranteed purchase options, which allow you to buy additional life insurance coverage at specified times, regardless of your health.

Cash Value Life Insurance builds cash value within the policy. This amount, part of which is guaranteed under many policies, can be used in the future for any purpose you wish. If you choose, you can borrow cash value for a down payment on a home, to help pay for your children's college education, or to provide income for your retirement. (Note: Borrowing cash value from your permanent life insurance policy requires the payment of loan interest and will affect your total policy values.) Also, if you decide to stop paying premiums and surrender or cancel your permanent insurance policy, the guaranteed policy values are yours.

Recommendation

When purchasing life insurance coverage — renewing or converting a term policy — look at more than just the premium. Consider the financial rating of the insurance company. Consider your long term goals and needs for protection. A professional insurance agent can discuss your life insurance goals, analyze your insurance needs and review the pros and cons of the various life insurance policy options available.

I hope that helps! Best of luck to you.