Term VS Whole Life Insurance – What is The Best Policy for Me?

If you are not sure which type of policy you should get whether, Term VS Whole Life Insurance this guide should help you get closer to your decision. For starters, this article will only take about 4 minutes to read at most. From there you can research a bit more or you may be comfortable enough to go ahead and purchase a policy on your own.

Below is an outline of the positives and negatives of term vs whole life insurance. We follow up by giving our opinion on the subject.

Term Life Insurance

Positive:

  • Cheaper than whole life
  • Larger face amounts are affordable

Negative:

  • It goes away after the term is complete (and you lose the money put into it if you live)
  • When term expires- life insurance is gone. If you still have a need for life insurance. Then you would need to get a new policy.

Whole Life

Positive:

  • It’s an asset
  • Builds cash Value
  • Earns interest on cash value

Negative:

  • Expensive
  • Interest earned is very low
  • Not a very good investment- from a return standpoint.

For a more detailed analysis of the advantages of whole life insurance and whom it may
benefit the most click here.

Summary

When comparing term vs whole life insurance it is best to be a little patient when shopping. I believe getting a good agent is very important as well.

Whole Life Insurance is not the best option for many people. If you live in an apartment and have no other investments then it could work for you. It won’t win any awards for interest earned but at least you can say you have one investment. Better than nothing for sure. It is also the only option for covering your entire life span. If that is a concern of yours.

Term Life is really the way to go for most people. Especially, if you are young, paying off an asset like a home, and are still in your earning years. Term policies can also be good for older clients who are near paying off the home, have other assets and cash and just want a short policy to get them to retirement.

Keep in mind it is usually better to go with longer terms. If you think you will need this life insurance policy for the next 20 years, get the 30 year term of the same face amount. Life seldom turns out the way we anticipate. Also, it is better to have a little too much coverage than not enough. Generally speaking of course! If I knew I needed about 400k. I would go with a 450k to 700k policy. Remember, expenses get higher and higher every year.

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