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Question DetailsAsked on 8/16/2013

which is better term or life insurance

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3 Answers

0
Votes

Whole life and term each have their own advantages.


Term life insurance is the least expensive form of life insurance. The term is essentially a rate guarantee. So, if you purchase a 30 year term life insurance policy for $18.52 monthly, then that premium will stay at $18.52 for 30 years.


Whole life insurance is more expensive. The rate isn't guaranteed for as long of a term, and in exchange, the policy builds a cash value. This means, if you choose to cancel the policy after say 20 years, you will get back a sizable amount of money.


Sit down with a life insurance broker so see which option works best for you. Make sure to use a broker, not an agent. Brokers work for you and work with multiple insurance companies in your area. There services are also free. Agents on the other hand, typically work for only one insurance company, so they can't me impartial.

Source: http://www.iHealthBrokers.com/

Answered 7 years ago by iHealthBrokers.com

0
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Clarification on the prior comment:

1) Term insurance is still a type of Life Insurance - just for a fixed term, rather than for your lifetime. There are a number of types of non-term life insurance - permanent, annuitized, whole life, variable life, etc, etc - some of which build cash value, some do not, some provide for benefit pass-through to a spouse upon the death of the first, etc. Do some good web research on the different types before talking to an agent.

2) Generally, term life is better for people like young parents who can't afford a permanent policy but need substantial coverage now (like for a newborne or spouse), ones who expect to soon be covered by employer paid policies, and for elderly persons for whom a regular life policy is cost-prohibitive because they are too close to anitcipated life expectancy. Whole or permanent or variable life policies, assuming you keep them paid up, are good for life rather than a specific number of years so cost more due to the term uncertainty, but if you buy them young you can lock in some incredibly low rates. We bought life policies as lifetime investments for our children when born, at flat rates based on their age at that time, and those rates are currently (at about age 30) less than 25% of comparable term rates for their age, and will stay at constant dollar amount despite inflation for their lifetime. They have already accumulated cash value equal to 7 times the lump-sum premium we paid up front less than 30 years ago, and insurance value of is currently about 4 times the initial face value and climbing.

3) Insurance brokers are not "free" - they may be paid by the insurance companies on commission rather than direct by you, but while they do access multiple companies for quotes and policies and save you that trouble and research, you can commonly get a better deal direct from the insurance company. For instance, we did one life annuity policy for a family member with a big 5 insurance company, and it was 30% cheaper direct from the local company agent than through an independent broker. My wife just got a quote on a liability policy for a non-profit she works with - a $600 annual policy carried a $500 commission for the independent broker !

4) You can also usually get the cheapest rates with a group (like compamny or association or society group plan) rather than individual plan - though you do run the risk the plan will be dropped by the organization or insurance company or you will lose eligibility.

Answered 6 years ago by LCD

0
Votes

All life insurance is 'term'. Term terminates. Whole life lasts for the whole life of the insured (up to about 120, depending upon some factors).


You pay in advance for the protection. Term will terminate prior to the death of the insured (I understand less than three percent of term policies are ever paid off). If you want the insurance to be in force when you die, consider permanent insurance.


Permanent insurance can be called Whole Life, Life Paid Up at 98, Indexed Universal Life, or more than a half-dozen other lables.


Term is better if you only need it for a short period of time.


Permanent is better if you want it to be there regardless of when you pass away.


Permanent is better if you want to live off the proceeds if you live a really long time. (A local agent can explain how to do this for you.)


Contact a local agent (since I am in Nevada). Get your answers and make an informed decision.

Answered 6 years ago by ProfessorWonderful




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