Term vs Whole

We usually see term life insurance promoted these days, especially for younger people. But whole life insurance does have some advantages that come along with the higher premiums. Take a moment to have whole life insurance explained.

For one thing, whole life is, by definition, a permanent policy. As long as the premiums are paid, or the policy has been paid up, an insured person will be covered. Most specify that if the insured person dies before age 100, their specified beneficiaries will receive the policy face value. If the insured person survives until age 100, they will get the face value as a birthday present!

In addition, whole life insurance actually builds up a cash value. After the insurance portion has been paid for, any cash value earns a specified interest rate. In past years, the investment value was judged to be poor, but these days, when it is hard to earn more than a couple of percent on savings, and investments are shaky, a guaranteed return does not look that bad.

If you want lifetime coverage, and the ability to combine an asset with life insurance, than you may want to consider a whole life insurance policy as part of your coverage.

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When we think of term life insurance, we tend to think of young adults who are in their working years. They are in the middle of raising kids, saving for college, and paying off mortgages. They usually buy some term life insurance to protect their family if they die, and of course, many term policies also come with optional disability or critical illness riders. Of course, younger people do pass away, but mostly these policies are also great deals for life insurance companies. Most people do not collect the full benefit, either because they survive the 20 or 30 year term life insurance policy, or because they drop the policy at some point in the long term.

But more and more, we are asked about term life insurance for older people. Baby boomers, and even senior citizens need a few more years of life insurance protection. Perhaps they are putting off the traditional retirement age, or still have a mortgage or business deal they want to cover. Perhaps an annuity or investment needs a few more years to mature before they want to start using that as money to live on. Or nowadays, stocks may be low, and older people want to leave their money in until the market goes up again.

There are lots of reasons that older people might like to add an extra 10 years of term life insurance protection.  You can find term life insurance to age 75 with many companies. You may need to settle for a moderate face value and a shorter term, but the plans are out there. And you can even find term life insurance with no physical exam.

However, much older people, and people with severe health conditions, will probably need to look at guaranteed or simplified life whole life insurance, as a final expense policy. You can find final expense insurance quotes here.

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Whole Life Insurance Advantages and Benefits
By Marilyn Katz

Most of the time, insurance advisors want to discuss term life insurance. Because it is only purchased for a set span of time, or a term, the premiums are lower. For this reason alone, many agents probably believe that these sorts of temporary policies are more attractive to their clients. However, even though traditional policies may seem more expensive, it does have advantages that should be considered before taking out a long term contract like an insurance policy.

For one thing, whole life coverage will cover you for your entire life as long as the policy is kept in force. The policy will not expire. Furthermore, the premium rate you are quoted at 35 will be the premium you will pay when you are 65! Unless of course, you have purchased a policy that is designed to be paid up over a period of years. This is a great benefit. You can pay up your coverage over a period of years, usually ten or twenty, and then have the satisfaction of knowing that your life is covered forever!

On the other hand, some term policies do not guarantee that rates will remain level through the whole term. To guarantee that rate, you could have to buy an extra rider, and all of a sudden, that policy is not as cheap as it looked like before. If you do not make sure the premium will remain level, and you do not buy the rider, you could find your rates increased after five years. With a term policy, you will either have to accept the higher premium or lose the policy, with nothing to show for the years you did pay on it.

Another advantage of permanent coverage is that it can actually be used as an asset. When you build up cash value, you can borrow against that value. You can even choose to cash your policy in for the value. Of course, then you could be left without life insurance, but at least you will have some cash back for the premiums you put in. If you have a permanent policy, you can even choose to sell the face value of the life insurance policy in many states. The purchaser will continue making payments on the policy if it needs to be kept in force, but will pay a cash settlement to the insured person. For seniors on fixed incomes,

That is not to say that I am against temporary coverage. I would suggest making sure the premiums will stay level though and using the larger face values to cover a young family or house payments. But I would also consider purchasing a whole life policy. Because that term policy will expire, and then you will not have coverage at the very time in your life when it is difficult or expensive to obtain more insurance! So for many people, it may not be a question of which type to buy, but a question of how much of each one that you want!

Learn more about the Advantages and Benefits of Whole Life Insurance.

http://www.247quoteus.com/benefits-whole-life.html

Article Source: http://EzineArticles.com/?expert=Marilyn_Katz
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Term or Permanent Life Insurance?

Life insurance is a complicated subject that doesn’t make for fun, lively reading. But if you can stick it out and read this, you might just come out with an idea of what kind of life insurance you should buy: term or permanent life insurance. Before we get to the definitions, we want to mention you can compare no medical exam life insurance prices here!

Let’s make sure we’re on the same page with our definitions of term and perm life insurance.

Term life: Term policies cover you for the duration of the term period – one year, thirty years, until you turn 65, etc. It pays a death benefit when you buy the farm, so to speak.Permanent/cash value: Permanent polices are often referred to as “cash value” polices because they usually include a death benefit and some type of long-term, tax-advantaged savings plan. These are usually called whole life insurance and universal life insurance policies.

So term life policies pay a death benefit. (Side note: how much of an oxymoron is “death benefit”?) That’s it. It’s simple, and that’s one of the attractive things about term policies.

Cash value plans pay a death benefit, too, but they also have a savings component. So if, and this is the Big If, you hang on to your cash value life insurance policy long enough, the amount you earn with the savings account will balance or perhaps exceed the amount you pay in premiums.

The thing to keep in mind, though, is that cash value policies are more expensive. So cash value/permanent policies are probably not a worthwhile short-term investment, because it will take some time before the savings part accrues enough cash to counter the more expensive premium.

For you scanners out there, here’s the lesson you might take from what we’ve covered so far:

• If you’re going to hold on to your insurance forever—or at least longer than 15-20 years—then cash value/permanent might be a good pick.
• If you’re not going to hold on to your life insurance for that long, term life insurance probably a better option than cash value/permanent life insurance.

Term life advocates, particularly finance experts outside of the insurance industry, invariably say “buy term and invest the difference.” The “difference” refers to the amount extra you would have to pay for a cash value/permanent life policy. That extra amount, they say, can put to use elsewhere, such as into a Roth IRA or 401k, where it will offer a better rate of return than in a cash value savings account.

If you follow their advice and decide on a term policy, make sure you always look for renewable and convertible term life policies! Renewable policies allow you to renew your policy without a medical exam. Convertible policies come with the option of changing to a permanent policy, without a medical exam.

And as always, whenever shopping for an insurance policy, research your options, shop around, and buy from someone you trust. Compare Fast, Safe, and Free Life Insurance Quotes

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