When investigating life insurance you will surely come across
the terms "whole life" and "term life". Knowing what these life
insurance products are and what they can do for you and your
family is very important when deciding upon the type of policy
to buy.
Whole life Life insurance of this type is used as a vehicle for
investment as well as life insurance. A whole life policy builds
cash value. Depending upon the policy it is possible to cash it
out or, in some cases, to borrow against it.
Is whole life advisable?
Purchasing a whole life policy does cost more. Not only are you
paying for life insurance you are also paying for an investment
tool; this may burden the policy with additional fees and
expenses associated with making the investments. Further, the
return on whole life investments may not be as great as the
return on standard investments. Often calculating the amount of
the premium which goes toward the investment may be difficult
along with the return on investment.
Term life
A term life policy is much more simple and is definitely the
most common form of life insurance. It is bought in terms of one
to thirty years. A premium is paid and an established amount is
paid to the beneficiary upon the death of the insured.
Is term life advisable?
For a young or even middle aged person who foresees specific
financial needs to be covered in the event of his/her death term
life insurance may be the right choice. The defined benefit
makes estate planning easier. Up until the age of fifty and
sometimes even beyond a person in good health can purchase
substantial amounts of term life insurance for a reasonable
price.
There is no one size fits all answer to choosing life insurance.
Term life may be the best solution for most families but there
are situations in which whole life may be the better choice. The
best advice is to get as many quotes as possible and compare
rates and services.
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