All Life Insurance Tips

What is the best kind of life insurance to get? Which is most affordable?

(term, whole, universal, variable) I also would like your recommendations on good companies.

Public Comments

1. Term life is the most affordable because it is pure insurance and it is usually the best plan for most people. The other plans do have their place depending on your situation. The other plans also have a cash value which builds up in the policy using investments. You pay for the insurance plus you pay extra for the cash value and fees. However, you don't purchase cash value policies for the investment because you can usually do better with a mutual fund or other investment vehicle. Try calling your auto insurance agent. Many auto companies also have life insurance and you can get a discount if you get the policy through them. Sometimes the discount you receive on the auto insurance can pay for the life policy.
2. This is a question that is endlessly debated here. Term life policies offer death benefits only, so if you die you win (so to speak). If you live past the length of the policy, you (or, more specifically, your family members) get no money back. Permanent life policies offer death benefits and a "savings account" (also called "cash value") so that if you live, you get back at least some of, and often much more than, the amount you spent on your premium. You get this money back either by cashing in the policy or by borrowing against it. As you might expect, permanent life insurance premiums are more expensive than term premiums because some of the money is put into a savings program. The longer the policy has been in force, the higher the cash value, because more money has been paid in and the cash value has earned interest, dividends or both. The debate is all about that cash value. If you buy a policy today, your first annual premium is likely to be much higher for a permanent life policy than for term. However, the premiums for permanent life stay the same over the years, while the premiums for term life increase. That extra premium paid in the early years of the permanent policy gets invested and grows, minus the amount your agent takes as a sales commission. The gain is tax-deferred if the policy is cashed in during your life. (If you die, the proceeds are usually tax-free to your beneficiary.) The saying you always hear is, "Buy term and invest the difference." The fact is, it depends on how long you keep your policy. If you keep the permanent life policy long enough, that's the best deal. But "long enough" varies, depending on your age, health, insurance company, the types of policies chosen, interest and dividend rates, and more. The reality is that there is not a simple answer, because life insurance is not a simple product. Quoting Ginger Applegarth at MSN Money
3. Zarnev had the perfect answer. Term insurance is the cheapest. And, go to your auto insurance carrier first so you can get the most discounts.