"Better" is a completely subjective term in this case. The question is really about covering your risk and whether that risk is temporary or permanent. Term insurance is usually used to offset a temporary risk such as a mortgage or other debt that has a specific term. Whole Life, and other types of permanent insurance, are generally used to cover risks that are ongoing with no expiration date, like your income or living expenses.
When working with my clients, we spend more time identifying risks and classifying them as temporary or permanent, then assigning amounts to each. The we match the product to the risk and the budget. If cash flow isn't an issue(which it usually is), I recommend 100% permanent insurance as it's the most cost effective over the long run. If you live long enough, the cash value in the policy will equal or surpass the premiums paid, effectively making your net outlay zero or better. What I usually find is that people do have a budget but still want to cover themselves properly and we end up covering the temporary risk with term insurance and the permanent risk with some type of permanent insurance, like whole life.
The more important question isn't which is better, but how much is needed. Set up correctly, you could start out with mostly or all term insurance and convert it to permanent as your budget allows. Another factor to consider is age and insurability. The earlier in life you buy life insurance and the healthier you are, the less it will cost.
In summary, the best insurance is the insurance you buy now, when you're younger and healthier. Find a good advisor and he/she will help you determine the amount and type which best fits your situation. Get insured first and lock in your insurability. You can always make changes in the future.
Agency Owner, 4701 N State Road 26, Janesville WI.
The best life insurance ? is the life insurance that is in force when you die. term or whole irrelavant, as long as it is inforce. each may have different benifits while your making the premiem payment, but bottom line, have something. buy as much as you can afford, but do mot ove-rextend yourself.
Solution Provider, Madison Strategic Partners Group, Greater New York City Located, Serving Clients Nationwide
The BEST life insurance product is the one that meets your needs. Therefore, you must ask yourself;
What is the goal???
Term and Permanent insurance are two different products for two completely different needs.
Term insurance is a product for just that, a fixed term, with either a level premium for the selected term or an increase annual payment if you were to choose renewable term. Since the contract is for a fixed period of time, premiums are typically a portion of what the same coverage would be with a Permanent product as there are no cash accumulation or surrender features, making it affordable for those who need it. Regardless, term insurance is great for those with a need for coverage in the event of a loss of life, for a fixed term, i.e. the income or performance of the insured will be relied on by others. Additionally, term insurance is a great way for families with a limited income, to protect and provide for the family and young children in the event of the loss of the family breadwinner or equally important, the caregiver (many "breadwinners" undervalue the benefit provided by the stay-at-home spouse and over look childcare costs!) which will help with living and education expenses for the surviving family. In the future, these young families can always re-analyze goals and needs and when their income allows, and convert to a permanent product.
Term is also very useful for businesses to protect themselves against the loss of production and revenue in the event of a death of a key employee. This type of insurance planning called Key-man coverage, is cost affordable when using term insurance.
Lastly, many of the attractive riders that are issued with permanent life policies can also be issued with term policies.
Permanent insurance is a product with virtually infinite uses depending on your needs. Permanent life insurance products are just that, permanent for the life of the insured, so long as the owner has paid a sufficient amount of premium to maintain the coverage. In comparison to term, permanent life insurance is more expensive in order to account for the cost of insurance in later years of the insured’s life. However, there are multiple advantages to buying permanent coverage as soon as you can afford it when you are younger. Aside from a lower level premium amount to carry the policy to maturity, more time will allow for a larger accumulation of cash value in the policy. This cash value, accumulating at a tax-deferred rate that beats current treasuries, can also be accessed through policy loans and withdrawals in the event of emergency cash needs, can be used as collateral for business or personal loans and can also be used to support you during retirement, assuming that the need for coverage has been reduced.
There are two main forms of permanent coverage, Whole Life products and Universal Life products, each with their own attractive features including dividends, increasing death benefit, flexible premiums and crediting rates indexed to stock market performances.
Before making the decision to purchase either, be sure to sit down for a [typically free] consultation with a licensed life insurance agent who will help you identify both your short term and longer term needs and goals. Together, you should be able to put together an effective plan that will blend affordability and proper protection to meet your life insurance needs.
Insurance Advisor, Lordship Insurance Services, California
What do you need? Each type of policy meets a certain need. The only reason insurance companies developed these types of policies is there was a need. Don't let any agent or insurance company tell you that only one policy meets the needs of all situations. You need to clearly outline what you need insurance to do and then purchase the type of policy that best fits your budget. Remember, insurance is insurance; you have other options to invest if you want to do that instead of using insurance.
President, Lane Independent Agency, Southern California
Whole is definitely better, if you can afford the start up years (1-3). Term will give you more coverage at the start, for a smaller fee, so it is good for those with low income starting out. But once you can pay the whole life amount, it ends up being cheaper, because it is yours forever, the price never goes up, and you can borrow against it and fund college or a house tax free.
Insurance Adviser - Broker, SC Insurance Services, Oahu, Hawaii
Term and Whole Life insurance both have their place, and in their proper place each could be said to be the better choice. However that said, especially for a younger, healthy person, a Whole Life policy with a Mutual insurance company is by far the most useful, hence wisest choice. There are so many more advantages with Whole Life including the ability to become your own personal bank that in my opinion the only time one would want to purchase a Term policy is if they already had a significant whole life policy and they just want to insure a large purchase like real estate in a way that it wouldn't imapre their full use of their whole life policy.
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When working with my clients, we spend more time identifying risks and classifying them as temporary or permanent, then assigning amounts to each. The we match the product to the risk and the budget. If cash flow isn't an issue(which it usually is), I recommend 100% permanent insurance as it's the most cost effective over the long run. If you live long enough, the cash value in the policy will equal or surpass the premiums paid, effectively making your net outlay zero or better. What I usually find is that people do have a budget but still want to cover themselves properly and we end up covering the temporary risk with term insurance and the permanent risk with some type of permanent insurance, like whole life.
The more important question isn't which is better, but how much is needed. Set up correctly, you could start out with mostly or all term insurance and convert it to permanent as your budget allows. Another factor to consider is age and insurability. The earlier in life you buy life insurance and the healthier you are, the less it will cost.
In summary, the best insurance is the insurance you buy now, when you're younger and healthier. Find a good advisor and he/she will help you determine the amount and type which best fits your situation. Get insured first and lock in your insurability. You can always make changes in the future.
What is the goal???
Term and Permanent insurance are two different products for two completely different needs.
Term insurance is a product for just that, a fixed term, with either a level premium for the selected term or an increase annual payment if you were to choose renewable term. Since the contract is for a fixed period of time, premiums are typically a portion of what the same coverage would be with a Permanent product as there are no cash accumulation or surrender features, making it affordable for those who need it. Regardless, term insurance is great for those with a need for coverage in the event of a loss of life, for a fixed term, i.e. the income or performance of the insured will be relied on by others. Additionally, term insurance is a great way for families with a limited income, to protect and provide for the family and young children in the event of the loss of the family breadwinner or equally important, the caregiver (many "breadwinners" undervalue the benefit provided by the stay-at-home spouse and over look childcare costs!) which will help with living and education expenses for the surviving family. In the future, these young families can always re-analyze goals and needs and when their income allows, and convert to a permanent product.
Term is also very useful for businesses to protect themselves against the loss of production and revenue in the event of a death of a key employee. This type of insurance planning called Key-man coverage, is cost affordable when using term insurance.
Lastly, many of the attractive riders that are issued with permanent life policies can also be issued with term policies.
Permanent insurance is a product with virtually infinite uses depending on your needs. Permanent life insurance products are just that, permanent for the life of the insured, so long as the owner has paid a sufficient amount of premium to maintain the coverage. In comparison to term, permanent life insurance is more expensive in order to account for the cost of insurance in later years of the insured’s life. However, there are multiple advantages to buying permanent coverage as soon as you can afford it when you are younger. Aside from a lower level premium amount to carry the policy to maturity, more time will allow for a larger accumulation of cash value in the policy. This cash value, accumulating at a tax-deferred rate that beats current treasuries, can also be accessed through policy loans and withdrawals in the event of emergency cash needs, can be used as collateral for business or personal loans and can also be used to support you during retirement, assuming that the need for coverage has been reduced.
There are two main forms of permanent coverage, Whole Life products and Universal Life products, each with their own attractive features including dividends, increasing death benefit, flexible premiums and crediting rates indexed to stock market performances.
Before making the decision to purchase either, be sure to sit down for a [typically free] consultation with a licensed life insurance agent who will help you identify both your short term and longer term needs and goals. Together, you should be able to put together an effective plan that will blend affordability and proper protection to meet your life insurance needs.