Whole Life Insurance!
Permanent life
insurance (also called whole life insurance) is exactly what
its name implies, insurance that covers your whole life.
Term life insurance as you recall only provides protection
(death benefit) for a stated period of time. See your online
whole life insurance quote here. Another product that might
interest you that is also a permanent type of policy is a
universal life insurance policy.
Whole
life vs Term life which is
better?
Unfortunately, this is an arbitrary
question because it solely depends on your situation, needs
and goals. So the answer could be Yes or no or sometimes
neither. Why? You know the saying "two heads are better than
one?" With life insurance, often times the best solution is
a combination of both as many people need both temporary
(term insurance) and long term (permanent insurance) to
fulfill the family's needs and goals. There are distinct
differences between the two that may help guide you in the
direction you need to choose the best life insurance policy
when your actually ready to buy life insurance.
Whole life insurance offers two major life insurance
benefits term life insurance policies cannot.
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1) Permanent life insurance provides
Continuous lifetime coverage for a fixed/level
premium (as long as the premiums are paid on time)
while the coverage for term life ceases when the
term ends and premiums generally increase at each
renewal often making it too expensive to
keep.
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2) Whole life insurance can be an investment
vehicle by accumulating guaranteed cash value which
is tax-deferred while providing you lifetime
coverage. Cash values can allow the policy owner to
borrow against the policy value or withdraw all or
a portion of the cash value through policy loans.
Cash value can be accessed for emergencies or other
financial needs and may be eligible for dividends.
This makes a whole life insurance policy a good
choice for individuals with long range financial
goals. Examples of Permanent insurance needs are:
using life insurance to provide future income for
loved ones, pay final expenses and estate taxes or
to donate money to a charity. Universal life
insurance and variable life insurance are examples
of whole life policy. Term life insurance does NOT
accumulate cash value. It provides a death benefit
only which means you 'have' to die to see any
investment returns from your premiums and is used
for short term needs such as paying off a car loan
or mortgage or to pay for college.
Which is cheaper term or permanent/whole
life?
Initially, term insurance is much cheaper, more affordable life
insurance hands down. Which is why many people choose a cheap
term life insurance policy. Term life insurance provides the
largest amount of death protection (2x's that of whole life)
for your premium dollars. Which makes insurance ideal for young
families; it's affordable term life insurance. CAUTION: When
the term ends so does your coverage. Premiums sky rocket with
each renewal leaving the policy too expensive to continue. If
you outlive yourterm life policy, like car insurance your
premium dollars go to waste.
With permanent
/whole life insurance, you pay considerably higher premiums
for the same face amount of term life insurance, but they
are less than the cumulative premiums you would otherwise
pay if you were to keep renewing a term life insurance
policy into advance age. This is because the interest earned
on the cash value of a permanent policy helps offset the
higher cost of straight life protection as the insured grows
older.
*Before you buy
life insurance, speak with an experienced life insurance
agent (see how to choose a life insurance agent) who will
LISTEN to your current and future needs. Life insurance
agents represent you not insurance companies so it is the
agents job to get you the lowest life insurance rate for the
life policy that is appropriate, affordable and makes sense
for you and your family.
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