All Life Insurance Tips

Is term life insurance the best type to buy and why?

Public Comments

1. If you only need the insurance for a limited time, then term is definitely the best. Mortgage protection, income replacement, college are all temporary needs so term works best for them. For permenant needs like funeral expenses, charitable giving etc. you will want whole-life or guaranteed universal life.
2. In my opinion term life insurance is the best when compared to other insurance. For more details log on to the following site
3. No idea. The best type of life insurance to buy, is the one that meets your financial goal. You don't go in to Home Depot and buy a power tool, without having something you're going to use it on. Life insurance is a tool. To pick the BEST tool, you have to DEFINE THE JOB.
4. The best type of life insurance to buy is the one that meets your needs and fits your budget. Term life provides temporary protection for 1-30 years, and builds no cash value inside the policy. If you outlive the policy term, the coverage expires. However, term life usually costs 2-3 times less than permanent life insurance, meaning you get alot more life insurance at a lower price. Also, term life offers coverage for 10, 15, 20, or 30 years, based on what you need. It is flexible, fairly easy to understand, and more affordable than permanent life insurance.
5. Here's the approach to take: First figure out how much life insurance you should have. You should have 15 or times your annual income. There are more complex formulas but that's a good start. Then think about what type. Term life insurance is dramatically less expensive initially because at the end of the term (10, 15, 20 years) the cost goes up dramatically. Very few term life insurance policies actually pay a claim. But if it means getting the right amount then get term life insurance to take care of loved ones and one can't afford the amount in permanent life insurance. Then get the term life insurance. Permanent life insurance, such as whole life insurance is much more expensive initially but is guaranteed to last for your lifetime. Also, the higher payment is offset somewhat by a reserve that the insurance company hold in your name called cash value. This cash value grows tax deferred (you don't pay income taxes unless you take out more than you put in). If you can afford some or all of your life insurance in whole life then you should. The better dividend paying whole life policies from companies like Guardian, Northwestern Mutual, Mass Mutual and New York Life have actually done well and have guaranteed values.
6. Why buying term and investing the difference makes more sense than cash value life insurance? 1) You can afford more protection for lower premiums in the beginning. 2) Most term policies contains provision to continue coverage until age 100. 3) Paying less premiums in the beginning allows you to free up money to save money elsewhere. 4) This enables you to find the right savings vehicle to meet your objective. 5) By keeping insurance and investments separate, you have more flexibility on how to spend your money. You can change your life insurance or your investments without either one of them affecting the other. For example lets say you pay $50/month for $500,000 policy and invest $50/month into a Roth IRA. You can lower your coverage to pay less premiums and invest more money or you can stop investing and get more coverage. 6) You control how and where your money is invested. 7) You maintain full access to your savings and investments. 8) If you die during the level term, your family gets the death benefit and all your savings and investments. 9) If you outlive the level term, you probably won't need as much coverage at this point because you are near retirement. The most logical choice would to pay less premiums and invest more money.