It depends on your need. Term insurance is designed for temporary needs. To cover a mortgage or debts or provide a young family maximum protection while their family is growing. Whole life is designed to cover permanent needs such as final expenses and estate protection. While whole life is has a higher monthly premium, in the long run it is actually less expensive than whole life. Premiums for term insurance go up with each term period and there is no equity build up so it is pure cost. Whole life develops equity in the form of cash vale. The premiums are designed never to go up no matter how old a person is and the death benefit will be available when most people need it, in old age. When you subtract the cash value from the total premiums paid you get the true cost of the whole life, which in later years will be far less than the cost of term insurance.
Which life insurance is better, Term or Whole Life? It is a debate that has great points on both sides.
In reality, most people need more life insurance than they can afford to purchase in Whole Life, but they don't need that large amount of coverage for a lifetime. Term life is an economical choice for large amounts of coverage for relatively short amounts of time.
On the other hand, most people need a small amount of final expense coverage, and this cannot be Term insurance or there is a risk of it not being in effect at the time of death.
Also, Whole Life can be used for estate planning, business succession, and other permanent needs that justify the higher premium, especially when, as Ted stated, cash value builds up to offset it.
There is no one right answer for everyone, but there are many choices. A good agent will guide you to find the best policy or policies for your unique needs, desires, and budget.
President, Lane Independent Agency, Southern California
Hey, wait a minute. You are leaving out what is in my opinion, the best of the best. This category is Equity Indexed Universal Life. It is permanent insurance, like whole, but at a lower cost, like term. It builds up equity, like whole, but is tied to the stock market, with none of the risk. It has a guaranteed bottom, and will never go down, but will go up, with a cap, when the stock market goes up. It allows your equity to grow much faster that whole, at a lower cost. You need to consider this product in making your decision. Talk with your agent. GARY LANE. garylane@cox.net. 7144229616. Available through Premier Financial Alliance and National Life Group, one of America's oldest insurance companies! Thank you.
Regional Marketing Director, Capital Choice Financial Group,
Always purchase a level term policy in lieu of a whole life policy! Level term protection will give you the correct amount of insurance that you will need to cover debt, final expense, income replacement, and college funding for kids in the early years when you need it the most. In most cases, I recommend to my clients a 20yr level term because this will get them to a period when debts are lower, mortgage paid down, and kids are out of the house. At this time, they can reassess there financial situation and see what they have saved in 401ks, IRAs, and basic savings. The need for life insurance will always become less as time goes on until it becomes 0. Buy term and invest the difference is the best way to treat your life insurance need.
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In reality, most people need more life insurance than they can afford to purchase in Whole Life, but they don't need that large amount of coverage for a lifetime. Term life is an economical choice for large amounts of coverage for relatively short amounts of time.
On the other hand, most people need a small amount of final expense coverage, and this cannot be Term insurance or there is a risk of it not being in effect at the time of death.
Also, Whole Life can be used for estate planning, business succession, and other permanent needs that justify the higher premium, especially when, as Ted stated, cash value builds up to offset it.
There is no one right answer for everyone, but there are many choices. A good agent will guide you to find the best policy or policies for your unique needs, desires, and budget.