With Life insurance, the younger and healthier you are the less the premiums. I would by a policy to keep for final expenses as early as possible. A parent can take one out on a child for example. Make sure you allow for inflation. This would be your foundation. then, add term, invest, whatever you want to do.
My rule of thumb is that the younger you are, the more you should consider term life insurance. I have only provided whole life insurance to older adults on a budget that would pay more for term insurance at their current age. If you are older than 50, whole life insurance may be a better option because it may be cheaper than term at that point. If you are younger than 50, I would go for term insurance. It is less expensive for you and you can get more coverage than whole life.
My answer to this is it really depends on what you are looking for. Sure premium is a factor however, consider what guarantees you are looking for. If you want a guarantee on the Cash Value at a future date, WL (whole life) may be the answer. Typically you are guaranteeing the cash value as well as the death benefit. WL also pays out dividends. You can either feed those back into the policy to get more growth or take them (perhaps as income as appropriate). Whole Life can be good for younger ages as well. The premium is very low and will build value over time to be used as needed. There are many options within WL so as you build your policy, consider ALL the options and then add those which make sense.
Regional Marketing Director, Capital Choice Financial Group,
The only time a person should even think about buying a whole life insurance policy is if he or she didn't save enough money for final expenses or didn't plan for their inevitable funeral. Level term protection is good for most everybody at any age because of it's affordability and if the person is still healthy then they can get a policy that would take care of their final expenses which would only be $10,000-$15,000. If they are not healthy then a graded death benefit term or whole life may be the answer. The bottom line is that a person that has worked and saved his life and paid off his debt by retirement or shortly after should be self-insured.
When is not necessarily the best question to ask as to why to buy whole life insurance. If you know why you are purchasing insurance, that will help to determine your when. Most whole life policies pay out very little in dividends so I would look at other vehicles if you want dividends. Also, life insurance is a tax free vehicle when it pays out so consider that when you are looking at life insurance.
To get to the root of the answer, most people purchase Whole Life policies as final expense policies because there isn't much of a reason to purchase Whole Life policies otherwise. The interest rate is dismal, dividends are not worth mentioning. The cost of a whole life policy can be affordable as to building up the savings or investment vehicle versus on your own.
So, I would not purchase a whole life policy prior to age 50.
Insurance Advisor, Lordship Insurance Services, California
It depends on a variety of factors; what is the primary objective of the client who is looking for insurance; how much insurance do they need; are they lookng for features such as cash value, paid up policy, etc. A proper financial needs analysis with the client will help determine their insurance needs and then a good agent will direct them to the plan best suited for their needs and their budget.
President, The Firm of Steven H. Kobrin, LUTCF, 6-05 Saddle River Rd #103, Fair Lawn, NJ 07410
Whole life insurance is for a very special kind of person.
First of all, you are someone who sees the need for life insurance protection on a lifelong basis. Not just to cover the mortgage, not just to protect your family, not just as a supplement for your retirement.
You face the fact that as life goes on, your need for life insurance changes, but for many people, the need is always there. And it could be for you.
You know that if you bought term insurance, odds are you'd end up buying another policy anyway, after that one renews. At a higher price. And hopefully you’re insurable. Might as well lock in to guaranteed rates on a permanent basis.
This brings up the second point. You are a guarantee-oriented type of person. You realize that life insurance is the foundation of your financial portfolio. As such, it has to be strong. Reliable. You don't want too many variables in this product because, if you have a shaky foundation, your whole portfolio could crumble. Therefore, you want a guarantee on the premium, and you want a guarantee on the death benefit.
You are also someone who appreciates the added benefit of cash value inside whole life insurance. For many people, whole life insurance is the guaranteed portion of their asset portfolio. No other product gives better guarantees (go ahead and check out the interest rates on guaranteed products out there. Then compare them to the guarantees whole life gives you.)
On top of that, with a top-flight company, the dividends - the non-guaranteed portion of the cash build up - can be pretty rich. With a little strategic thinking, those dividends can enhance the value of that product. They can be used to offset the cost. They can be used to enhance the survivor benefit. They can be used to put cash in your pocket. They can be used to offset the cost of another policy.
Lastly, whole life insurance is for disciplined people. In order to receive all the benefits named above, you need to stick to the payment schedule. It's a fixed-premium product and will not tolerate underfunding, or over funding, or skipping payments.
If you realize the bang for the buck you can get with whole life insurance, and have the discipline to stick to a premium payment schedule, then you'll be glad you bought this policy.
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To get to the root of the answer, most people purchase Whole Life policies as final expense policies because there isn't much of a reason to purchase Whole Life policies otherwise. The interest rate is dismal, dividends are not worth mentioning. The cost of a whole life policy can be affordable as to building up the savings or investment vehicle versus on your own.
So, I would not purchase a whole life policy prior to age 50.
First of all, you are someone who sees the need for life insurance protection on a lifelong basis. Not just to cover the mortgage, not just to protect your family, not just as a supplement for your retirement.
You face the fact that as life goes on, your need for life insurance changes, but for many people, the need is always there. And it could be for you.
You know that if you bought term insurance, odds are you'd end up buying another policy anyway, after that one renews. At a higher price. And hopefully you’re insurable. Might as well lock in to guaranteed rates on a permanent basis.
This brings up the second point. You are a guarantee-oriented type of person. You realize that life insurance is the foundation of your financial portfolio. As such, it has to be strong. Reliable. You don't want too many variables in this product because, if you have a shaky foundation, your whole portfolio could crumble. Therefore, you want a guarantee on the premium, and you want a guarantee on the death benefit.
You are also someone who appreciates the added benefit of cash value inside whole life insurance. For many people, whole life insurance is the guaranteed portion of their asset portfolio. No other product gives better guarantees (go ahead and check out the interest rates on guaranteed products out there. Then compare them to the guarantees whole life gives you.)
On top of that, with a top-flight company, the dividends - the non-guaranteed portion of the cash build up - can be pretty rich. With a little strategic thinking, those dividends can enhance the value of that product. They can be used to offset the cost. They can be used to enhance the survivor benefit. They can be used to put cash in your pocket. They can be used to offset the cost of another policy.
Lastly, whole life insurance is for disciplined people. In order to receive all the benefits named above, you need to stick to the payment schedule. It's a fixed-premium product and will not tolerate underfunding, or over funding, or skipping payments.
If you realize the bang for the buck you can get with whole life insurance, and have the discipline to stick to a premium payment schedule, then you'll be glad you bought this policy.