President, Lane Independent Agency, Southern California
Whole life is almost always better than term, because it locks in your premium for your lifetime, and always develops equity, from which you may borrow, and / or keep tax free. There some folks who believe they will not need life insurance after ten years (no family, friends, charities, causes? Really?). For those folks, if they plan on only have life insurance for ten years, during that short period, term will actually cost them less. Thank you. GARY LANE.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
When is whole life better than term? When insuring the time coverage is needed goes beyond 20 years or so. Term is short for temporary coverage. Term works best when you know your end date and know you will not need coverage beyond a certain date. Term is really not a plan when there is no known end date for the need. Whole life is best for long term needs and for those who really aren't sure how long they may need coverage beyond 20 years or so.
President, The Firm of Steven H. Kobrin, LUTCF, 6-05 Saddle River Rd #103, Fair Lawn, NJ 07410
Let me count the ways…
1. When you want to be sure your benefit will be paid out.
People tend to keep permanent insurance and drop term. If you drop the policy, no one will collect the money you paid for!
2. When you want a premium guarantee for life.
Term will, as you know, guarantee the premium for a fixed period only.
3. When you want cash accumulation at a guaranteed interest rate that is typically higher than any other guarantee-oriented product. What other product is a better fit for the conservative portion of your financial portfolio?
I don't think you can state whole life is actually better than term life insurance or term life insurance is better than whole life. It just depends on the need by you, the client. There are many different product options when it comes to life insurance. There is the right product for practically every situation.
The true use of whole life is when there is a level premium need for life insurance your "whole life" hence the name. However, whole life insurance has become the Swiss Army knife of life insurance. The riders and cash value can be used for critical illness, terminal illness, children's college funds to retirement benefits. There are now lots of uses for whole life insurance.
Term life insurance is meant more to cover a need for a fixed amount of time. There are term limits that vary from annually to 5 years, 10 years, 15 years, 20 years, 25 years, 30 years and even 35 years. You may also set a premium on a universal life plan that doesn't build cash value other than to level your premiums as far as age 151 years old.
The main thing to consider which type of life insurance you need is to first identify your need for life insurance. A wise man once shared, you should buy life insurance like you will die tomorrow and invest like you will live forever.
Find an experienced independent broker to help you identify your needs and shop the market for the best product at the best price for your unique situation. Good luck.
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1. When you want to be sure your benefit will be paid out.
People tend to keep permanent insurance and drop term. If you drop the policy, no one will collect the money you paid for!
2. When you want a premium guarantee for life.
Term will, as you know, guarantee the premium for a fixed period only.
3. When you want cash accumulation at a guaranteed interest rate that is typically higher than any other guarantee-oriented product. What other product is a better fit for the conservative portion of your financial portfolio?
The true use of whole life is when there is a level premium need for life insurance your "whole life" hence the name. However, whole life insurance has become the Swiss Army knife of life insurance. The riders and cash value can be used for critical illness, terminal illness, children's college funds to retirement benefits. There are now lots of uses for whole life insurance.
Term life insurance is meant more to cover a need for a fixed amount of time. There are term limits that vary from annually to 5 years, 10 years, 15 years, 20 years, 25 years, 30 years and even 35 years. You may also set a premium on a universal life plan that doesn't build cash value other than to level your premiums as far as age 151 years old.
The main thing to consider which type of life insurance you need is to first identify your need for life insurance. A wise man once shared, you should buy life insurance like you will die tomorrow and invest like you will live forever.
Find an experienced independent broker to help you identify your needs and shop the market for the best product at the best price for your unique situation. Good luck.