President, Lane Independent Agency, Southern California
Term covers you for the period you sign up for, so long as you continue to pay it. It builds no equity, and is like renting a home rather than buying. It is good for starting out but you want to try to build to Whole Life if you possibly can. Even a little of both would be better, but remember, some life insurance, either Term or Whole is better than none. I would love to discuss your options with you. New York Life, America's oldest, largest and highest rated life insurer has a large variety of life policies, and has recently reduced the pricing on its term life policies.
Enrolled Agent-licensed to practice before the IRS, Samuel N Smith, EA, South Carolina
If you are considering term insurance please ask yourself these questions. How old am I? If I buy 20 year term now how old will I be when I have to buy another policy? Does it meet your needs to buy term life considering the objective of the policy? The purpose of term has always been to allow the purchaser to invest the difference between the cost of term life and permanent coverage. How much are you "investing" now? Every policy you have means you are paying "administrative costs" for that policy. What if you have one good size permanent policy purchased at your current age to meet all your life insurance needs or can you buy a term life and then be able to meet your financial objectives and not have to buy another life insurance policy? Finally, you need to have a personal advisor that puts your needs first and has the integrity to make recommendations based on your TOTAL financial plan and not some life insurance agent pedaling life insurance
What do you need to know about term life insurance?
You need to know that:
1) Unless you have some type of rider stating otherwise, term life insurance will jump way up in price at the end of the term, and go up in price annually after that. Or it will end at the end of the term.
2) Most term life insurance will stay the same premium during the entire term, and the death benefit will stay the same for the entire term. But you need to ask your agent to make sure you are buying a guaranteed level premium, and a guaranteed level death benefit, to be sure.
3) There is no cash value in term life insurance. Only ROP (return of premium) term will pay back a substantial cash value if you keep it enough years, and are alive at the end of the term.
4) If you miss a payment more than two months, your term policy will end. There is no cash value in it to pay the premium, so it is very important to keep up your payments with term life insurance.
5) Many term policies are convertible to permanent insurance for at least part of the term period. If you convert your term policy, you must convert it to the policy or policies stipulated by the life insurance company at that point in time. These policies may or may not have lifetime guarantees, but will be UL or WL. The rate will be based on your age at the time of conversion. There are no health requirements; your permanent policy will be rated similarly to what your term policy was rated.
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You need to know that:
1) Unless you have some type of rider stating otherwise, term life insurance will jump way up in price at the end of the term, and go up in price annually after that. Or it will end at the end of the term.
2) Most term life insurance will stay the same premium during the entire term, and the death benefit will stay the same for the entire term. But you need to ask your agent to make sure you are buying a guaranteed level premium, and a guaranteed level death benefit, to be sure.
3) There is no cash value in term life insurance. Only ROP (return of premium) term will pay back a substantial cash value if you keep it enough years, and are alive at the end of the term.
4) If you miss a payment more than two months, your term policy will end. There is no cash value in it to pay the premium, so it is very important to keep up your payments with term life insurance.
5) Many term policies are convertible to permanent insurance for at least part of the term period. If you convert your term policy, you must convert it to the policy or policies stipulated by the life insurance company at that point in time. These policies may or may not have lifetime guarantees, but will be UL or WL. The rate will be based on your age at the time of conversion. There are no health requirements; your permanent policy will be rated similarly to what your term policy was rated.