Does Term Life Insurance Fund A Savings Plan?
5527 POINTSview profileMarlin McKelvyPresident, Consumer Directed Benefit Solutions, Memphis, TennesseeConventional term life insurance policies essentially provide a payment on death benefit if the policy holder passes away while the policy is in effect. While it is possible an individual would structure their affairs in a way that some or all of the proceeds from their life insurance policy went to fund someone else's savings plan, the term life policy itself is not savings plan vehicle. If a person's desire is to have a life insurance policy that also builds cash value over time as a potential savings device then some type of permanent life insurance policy would better suit this need.Answered on August 29, 2014flag this answer
21750 POINTSview profileJim WinklerCEO/Owner, Winkler Financial Group, Houston, TexasThat is a great question! Unfortunately, term life policies don't fund anything, unless you pass away during the specified term period. That is the reason why I try to steer people away from those popular TV advertised senior life policies like AARP and AAA; they end when you turn 80, and leave you without coverage, after years of paying for it. I'd highly advise that you consider another form of funding, one that will work for whatever it is that you are trying to save for. Term policies have no cash value of any kind unless you pass, so they are definitely not a good choice. Please feel free to contact me, if you'd like to discuss this further, okay? Thanks for asking!Answered on August 29, 2014flag this answer.JPG)
63333 POINTSview profilePeggy MaceMost of the U.S.No, Term Life Insurance does not fund a savings plan within the policy, like Whole and Universal Life Insurance do. The only type of term insurance that has any saving component is Return of Premium (ROP) Term. If you keep an ROP term policy at least half of the years of the term, it can return some of the premium if you drop the policy. If you keep the policy for the entire term, it can return all the premium you paid in.Answered on August 29, 2014flag this answer
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