All Life Insurance Tips

whole life or term life insurance? can't decide eh.?

whole is expensive but can be an investment, term is cheap but has a higher death benefit. which one you would pick? what insurance do you have?

Public Comments

1. You need to look at your particular situation. Why are you buying life insurance? Who are you protecting by getting it and how long will they need that protection? For most people, whole life is a lousy investment. You can get the same (or greater) death benefit for a much cheaper term insurance premium and invest the difference elsewhere.
2. Whole life insurance, as an investment, is like a Prada shoe, as a hammer. Life insurance is a CRAPPY investment tool. Define the goal - what do you want the insurance to DO for you, and how long. THEN you can pick the best, cheapest tool for the goal.
3. There are four major types of life insurance. Term - high death benefit for low cost, best used for insurance needs with fixed duration. Universal - lowest cost form of permanent life insurance. Can be used as a savings vehicle, though I do not recommend it. Best configured as a "Guaranteed No-Lapse" policy, which essentially makes it function like a permanent form of term insurance. Variable - very high risk financial instrument with elements of insurance and a market sensitive investment vehicle. Very, Very rarely appropriate. If you make half a million or more a year, you might, just might, have a situation where it could be useful. If you're not affluent, skip this. Whole Life - highest cost for lowest death benefit. Attached to an interest and/or dividend bearing account. Internal rate of return over long periods of time can be between 3 and maybe 7 percent, depending on company. Interest and dividends are NOT guaranteed. Legitimate uses can include deferred comp plans and other business uses. Also, because it costs so much, insurance carriers are usually more flexible with their underwriting on it, so if you cannot get other forms of insurance, you MAY luck out with whole life. Generally: If you have fixed duration obligations, use term insurance and put the rest into a Roth or other independent investment vehicle rather than using an insurance policy. If you have permanent obligations, try Guaranteed No-lapse Universal from one of the Big Three Mutuals (Mass Mutual, New York Life, Northwestern Mutual). If you have specific business needs that work well with it, like Deferred Comp plans, consider whole life, though there are other options. If you're rich and have money to burn, and just want something you can throw into the market which, when you die, will pass to heirs without probate, consider variable.
4. Life Insurance is basically a safeguard to replace your present income in case of your death,and is not an investment tool. Insurance companies pays you very lousy returns,so don't go for that. You must realize that in order to replace say your present annual income of $40000 you need 40000 X10= 400,000 coverage,which will be very costly if you buy whole and you will be left under insured. One drawback of Term policy is that you have to watch for is that let's say may be at later stage you develop some medical condition and have Term Insurance.Due to miss payment on premiums your policy may have to be reinstated and you will have to go thorough medical and may be you will not qualify or qualify for insurance at higher rates. In conclusion,Term Insurance is a better solution for most of the people.
5. I like more the idea of the whole life, but it depends on everyone needs, try this site http://linsurance.notlong.com here you can get quotes from different companies so maybe you can get a better idea.