Term life insurance can be a better solution depending on what problem you are trying to solve. If the problem is short term then a term solution may be appropriate. If the problem is permanent then the solution should be permanent. There are of course other factors not the least of which is affordability.
For example if you want to cover the cost of a loan, term insurance might be your best solution. If you want to leave a legacy then permanent insurance that is in force when you die not if you die before the term insurance expires or before the renewal is too expensive for you.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
Term life insurance isn't necessarily better than permanent life insurance - each has their own pros and cons. In short, it depends on what you need the coverage for (e.g. covering a mortgage vs. estate planning).
The big advantage of term insurance is you're getting more "bang for your buck" so-to-speak - meaning the rate per $1,000 of coverage that you're paying is much less than permanent coverage, however, the trade-off is that you only get to pay that rate for a short amount of time (10, 15, 20, 25, or 30 years) whereas your rates can be locked in for life with a permanent insurance policy. Once the initial period of premium guarantee expires, the policy changes to either annual renewable term insurance with premiums increasing each year (based on age) or the premiums remain the same and the death benefit decreases each year (this structure can be seen on term insurance that is featured on a universal life chassis). There is no cash value build-up in term insurance.
Permanent life insurance is designed to provide coverage for the rest of the insured's life and build cash value. Under a guaranteed universal life (GUL) program, the policy can be structured to keep premiums level and provide coverage up to a specified age (e.g. to age 90, to age 100, or even up to age 121) under the "dial down" process. Whole life features level premiums and death benefits and builds cash value at a faster rate (participating WL policies may pay dividends that can be used to increase the death benefit or decrease the premiums over time - non-participating WL policies do not feature this ability) - the trade off between this and guaranteed universal life is that to increase the cash value faster, the premiums will generally be substantially higher. For both GUL and WL, the carrier takes back the cash value upon the death of the insured, and pays out the death benefit proceeds. Therefore, GUL policies allow you to maximize your death benefit and minimize your premium dollars that you pay for the coverage.
I highly recommend consulting with an independent insurance agent/broker to determine what policy benefit structure will best serve your needs, review quotes, and help you through the application and underwriting processes. You can send me a private message by clicking on the "contact me" button if you would like assistance with your program.
Short answer? It's cheap. The longer answer has to do with your intended need for the policy, and for the length of that need. It doesn't make financial sense to pay more money for a whole life policy to cover a 4 year need, for example, any more than it makes sense for someone to buy a 5 year term policy and intend for it to cover their funeral expenses when they pass somewhere far down the road. Term policies are great for some things, and not so great for others. Please contact me, and I'll give you a fuller answer. Thanks for asking!
Insurance Adviser - Broker, SC Insurance Services, Oahu, Hawaii
The only way Term insurance is "better" is that it is cheaper than permanent insurance. But then again if the insured doesn't die before the term ends you've just given your money to the insurance company and you and your beneficiary get nothing. So is that better?
The only good thing I can say about term insurance is that it can provide some "piece of mind" for a little while until you can afford to convert it to Whole Life and then get not only piece of mind for the rest of your life, but also use the policy for a number of wealth growing strategies and benefit from them while you are still living - and still pass on a nice financial legacy -tax-free. Now THAT's Better!
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For example if you want to cover the cost of a loan, term insurance might be your best solution. If you want to leave a legacy then permanent insurance that is in force when you die not if you die before the term insurance expires or before the renewal is too expensive for you.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.
The big advantage of term insurance is you're getting more "bang for your buck" so-to-speak - meaning the rate per $1,000 of coverage that you're paying is much less than permanent coverage, however, the trade-off is that you only get to pay that rate for a short amount of time (10, 15, 20, 25, or 30 years) whereas your rates can be locked in for life with a permanent insurance policy. Once the initial period of premium guarantee expires, the policy changes to either annual renewable term insurance with premiums increasing each year (based on age) or the premiums remain the same and the death benefit decreases each year (this structure can be seen on term insurance that is featured on a universal life chassis). There is no cash value build-up in term insurance.
Permanent life insurance is designed to provide coverage for the rest of the insured's life and build cash value. Under a guaranteed universal life (GUL) program, the policy can be structured to keep premiums level and provide coverage up to a specified age (e.g. to age 90, to age 100, or even up to age 121) under the "dial down" process. Whole life features level premiums and death benefits and builds cash value at a faster rate (participating WL policies may pay dividends that can be used to increase the death benefit or decrease the premiums over time - non-participating WL policies do not feature this ability) - the trade off between this and guaranteed universal life is that to increase the cash value faster, the premiums will generally be substantially higher. For both GUL and WL, the carrier takes back the cash value upon the death of the insured, and pays out the death benefit proceeds. Therefore, GUL policies allow you to maximize your death benefit and minimize your premium dollars that you pay for the coverage.
I highly recommend consulting with an independent insurance agent/broker to determine what policy benefit structure will best serve your needs, review quotes, and help you through the application and underwriting processes. You can send me a private message by clicking on the "contact me" button if you would like assistance with your program.
The only good thing I can say about term insurance is that it can provide some "piece of mind" for a little while until you can afford to convert it to Whole Life and then get not only piece of mind for the rest of your life, but also use the policy for a number of wealth growing strategies and benefit from them while you are still living - and still pass on a nice financial legacy -tax-free. Now THAT's Better!