It depends on individual or family circumstance. A better question is how much life insurance is enough? Remember one reason for Life Insurance is income replacement. Having enough life insurance to ensure a family is protected is usually the best place to start. A term life insurance contract typically provides a large death benefit with a low premium payment. Provide peace of mind knowing your family will be protected then decide if and how much Whole Life Insurance is enough.
The term Whole Life means you will be paying premiums your entire, or "Whole" life. Having too much Whole Life Insurance might be an issue if the primary breadwinner loses his or her job and can no longer afford making premium payments. This is where Whole Life can be costly. When considering the purchase of Whole Life Insurance it is a long term, risk adverse strategy. Make sure you are able to make premium payments for at least 10 to 12 years regardless of job loss, increase in expenses, etc. All the risk is transferred to the insurance carrier and the interest crediting provides a guarantee. Plus there is usually a 'dividend' or return or premium. The only thing the insured needs to do is make sure they make the premium payments. There is no flexibility with these premiums, like Universal Life Insurance. It generally takes a long time to build cash value. For standard products and level premium schedules the break even point for premiums paid equaling cash value accumulation is generally 10-12 years.
Always ask your agent questions if you are unsure of how life insurance products work.
Insurance Advisor, Lordship Insurance Services, California
It will depend. Whole life insurance is designed to stay with you your whole life. Two distinct advantages to whole life is (1) premiums are fixed and never increase (2) there is a cash value build up within the policy. The amount of insurance you need will depend on a variety of factors including (1) your purpose for wanting insurance (2) what you want to see insurance accomplish once you are gone (3) the other assets you have in addition to insurance (4) do you need cash value or are you seeking pure insurance? The best way to answer this question is to contact an agent and let him go over with you the particulars of your situation and then develop a plan to help you achieve your goals.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Whole Life Insurance is designed to be in force when you die. Establish the lowest amounts that you want to pass to those that you love and make that your life insurance base. Use a permanent or whole life policy to meet that requirement. For shorter obligations use term insurance if you cannot afford the whole life.
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The term Whole Life means you will be paying premiums your entire, or "Whole" life. Having too much Whole Life Insurance might be an issue if the primary breadwinner loses his or her job and can no longer afford making premium payments. This is where Whole Life can be costly. When considering the purchase of Whole Life Insurance it is a long term, risk adverse strategy. Make sure you are able to make premium payments for at least 10 to 12 years regardless of job loss, increase in expenses, etc. All the risk is transferred to the insurance carrier and the interest crediting provides a guarantee. Plus there is usually a 'dividend' or return or premium. The only thing the insured needs to do is make sure they make the premium payments. There is no flexibility with these premiums, like Universal Life Insurance. It generally takes a long time to build cash value. For standard products and level premium schedules the break even point for premiums paid equaling cash value accumulation is generally 10-12 years.
Always ask your agent questions if you are unsure of how life insurance products work.