Term vs Whole » Term VS Whole Life

Whole Life Insurance Advantages – Standard Life

admin — Tue, 25 May 2010 13:11:29 +0000

Are There Advantages To Standard Whole Life Insurance Policies?

The name of this website is: term vs whole life insurance, so….

It seems like most of the ads we see for life insurance polices are for term life. And the mantra of many top financial advisors has also been to encourage their clients to choose term because it is cheaper. They tell their clients that they will be better off by investing the difference in other financial products. There is some truth to this, but it is only part of the story.

So you may be asking why anybody still buys whole life. It costs more, your financial analysts promises better returns elsewhere, and “everybody” is buying term. But please consider some advantages of whole life before you make a decision.

People Consider Whole Life Because…

Whole Life Does Not Expire. As the name implies, the policy can cover an insured person for their entire life. Term, of course, only lasts for the term length of the policy. Of course, insurers carefully underwrite these policies so they reduce the risk of them actually having to pay a death benefit before that period of time is up. So if a policy is paid up or paid off it should actually stay in force until the insured person does pass away. This way the beneficiaries can actually collect the death benefit.
Whole Life Can Build An Asset. A cash value policy can actually be worth something, apart from the insurance. This cash value can be an asset that can be borrowed against or cashed in. Another use for cash value life is to sell it in a senior life settlement that may help the insured person financially while they are still alive. In a senior life settlement, an investor will actually purchase the policy for some percentage of the face value. This amount will probably be more than the actual cash.surrender value or the policy.
Tax Advantaged Estate Transfer. The proceeds from life insurance policies are usually not taxed. That means that the beneficiaries can get cash from them without having to pay more taxes. This is one reason that they are attractive. They can be used to transfer wealth. They can also be used to settle businesses if some heirs will inherit the business, but some will not. The ones who will not run the business can inherit some cash to compensate them through a death benefit.
Safe Money. Insurance companies are highly regulated. States have plans to cover policies in the event a company does go under. The actual returns on these policies may not be that bad when you consider recent stock market declines, tax advantages, and the safety of the money. Plus, you are also getting your life covered.

Should You Buy Whole Life or Term?

There is never one correct solution for everybody. A lot of times, term is the best choice. The best choice for you really depends upon a variety of factors. Your own financial goals, budget, and expectations must be considered. Just make sure you buy a policy that is in your own best interest, and not in the best interest of your financial advisor or insurance agent.

The intent of this article is only to make you stop and think about some advantages of whole life before you buy insurance.

We Make It Easy To Compare Life Insurance

Before you buy, take a few moments to get standard whole life insurance quotes. You can compare them to the cost of term life insurance. This is a simple, safe, and free way to compare life insurance!

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Return of Premium (ROP) Term Life Insurance Riders

admin — Wed, 20 Jan 2010 14:03:26 +0000

What Makes Term Life Insurance Better?

One common thought on the whole term life insurance vs whole life insurance debate is the fact that whole life grows a cash value. This means that whole life has a surrender value, and may even be able to be used in a life insurance settlement transaction. Term lasts for a period of time, and if it is not used, it expires.

But there is one rider (addition) that can be added to some term policies to make them more attractive to consumers who are doing some long term planning. This is called a return of premium (ROP) rider. It costs a bit more, but in return, it will refund all premiums if no claims are made against the policy. This is a way to get one last benefit out of an expired policy – a big check in the mail!

There are some conditions. The policy must be kept in force (paid for) for the term to collect the full benefit. In general, no claims can be made against the policy. i.e. if it pays out a death benefit, it will not pay out a return of premium. Get more information on how ROP term life works.

Advantages of Whole Life Insurance Policies

admin — Wed, 12 Nov 2008 02:50:22 +0000

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.

Life Insurance For Older People

admin — Wed, 27 Aug 2008 17:05:48 +0000

Many older people wonder if they can still find life insurance for an affordable price. It is very common to find people looking for over 50s life insurance. Many of them did have coverage when they were younger. Some had a workplace life insurance benefit that ended when they retired. Others took out term life insurance, but the term expired. But just now, when coverage has ended, middle aged and older people may find that they have not outlived their need for life insurance.

But you can find coverage in middle age, and life insurance over 65 is not uncommon any more. For one thing, people are living longer. In fact, you can even find term life insurance with no medical exam that can be quoted with a quick online form, and in some cases, applied for online or with a fax or mailed application. Online life insurance quotes make it quick and easy to compare the policies available in your local area.

Many people looking for over 50s life insurance would rather have a seniors life insurance policy. Sometimes these policies are intended to cover burials and other final expenses. These are whole life insurance policies, intended for permanent coverage. You can also quote final expense insurance rates with simple online forms.

Term Life Insurance For Retirement Years

admin — Tue, 24 Jun 2008 15:23:38 +0000

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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Burial Insurance Policy Primer

admin — Mon, 03 Mar 2008 02:40:23 +0000

If you are over 50, and sometimes over 45, you have probably been approached with an offer for a burial insurance policy. Many people think that these are affordable ways to plan for the high expenses of modern funerals, but many consumers do not reallly understand what they are buying. In essense, a burial insurance policy is a whole life insurane policy with a fairly small face value ($2,500 – $25,000).

Furthermore, since life insurance companies understand that they are marketing life insurance for middle aged or senior citizens, these policies are usually either simplified or guaranteed issue. Before you buy, please learn about simplified issue vs. guaranteed issue life insurance. In summary, these type of policies will be designed for older people who may have health issues, and they probably won’t have the stricter underwriting requirements of term life insurance, though you can find no medical exam life insurance.

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Benefits Of Whole Life Insurance

admin — Sat, 12 Jan 2008 22:38:33 +0000

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

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Buy The Best Life Insurance For You

admin — Mon, 24 Dec 2007 17:41:45 +0000

Everybody asks me what the best life insurance is! However, I can not answer that question. Your choice of term life insurance vs whole life insurance vs term life insurance will depend upon your goals, your age, and your health. A young married couple with small children will probably want to consider a term life insurane policy to protect their family during the working years, but a retired person may find that a small face value whole life insurance policy for seniors suits their needs as final expense insurance! If you are concerned about having adequate life insurance coverage, but would also like to combine those payments with retirement savings, then universal life insurance can be an attractive way to accomplish your goals.

Whatever you choose, compare life insurance to find the best insurance quote for you. We found a $300 a year difference for one man who wanted a $100,000 term life insurance policy. These were all top life insurance companies!

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Term Or Permanent Life Insurance Coverage?

admin — Tue, 06 Nov 2007 21:43:35 +0000

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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Term vs Whole Life Insurance

admin — Sat, 27 Oct 2007 04:32:32 +0000

Term Vs Whole Life Insurance

Consumers are often confused about the difference between term life insurance and whole life insurance, and they may be confronted by a lot of confusing information. Of course, most information on comparing insurance policies is put out by insurance companies or insurance agents, and so one might suspect that they have an agenda. Nobody can really blame them, but many of them want to sell the products that will make them most money. However, you can find enlightened agents who are interested in speaking with clients, and then coming up with the best life insurance policy for each client.

Term Life Insurance, as the name inplies, is purchased for a certain length of time (or term). It is usually purchased for a period of years from 10 years to 30 years, though terms exist. Since an insurance company is going to take an application and underwrite any policy, they will only offer coverage if they believe the applicant has a good chance of surviving the term of he policy. This is one of the reasons why term life insurance is cheaper than whole life insurance.

On the other hand, whole life insurance will cover an insured person for their whole life. Usually the policy is designed to mature at age 100, at which time the company will pay out the full face amount, even if the insured person is still alive. But because most people do pass away before age 100, the insurance company is assuming a risk that they must eventually pay out on if the insured person keeps the policy in force. This is why whole life insurance is more expensive.

Whole life insurance also will grow a cash value, and so these policies can be used as a savings or investment vehicle as well as insurance. Generally, life insurancc policies are not the best investments, but of course, they also come with life insurance! So one advantage to having a whole life policy is that it can provide security of a death benefit while still being an asset that can be borrowed against or partially cashed in.

Note that cashing in a whole life policy for the cash value may not be the best way to profit from your insurance! Older people may be able to benefit from a type of deal called a life settlement. Investors are willing to buy permanent coverage from older people for a sum that is a much larger percentage of the actual death benefit (face value) than you will probably get by surrendering the policy back to the original insurer. Learn more: Life Settlements for Seniors

Who Buys Term Life Insurance vs Whole Life Insurance?

Many younger families would be fine with term life insurance. They will need the larger death benefit and lower premium rates while children are young and mortgages are owed. It may also suit them to add the purchase a smaller face value permanent policy while they are young. Premiums will be lower at a younger age, and the insured people can probably even pay the policy up over a period of years. This way, when they do age, they will have the security of retirement life insurance.

However an older person may be well served by a smaller face value on a whole life insurance policy to make sure their heirs have a convenient way to pay burial or final expenses. As people enter their senior years, it may be tough to find term policies. Though younger seniors in good health can still find term life for older people.

The Best Life Insurance For You?

In the end your own unique situation, budget, and future plans will impact your choice. You need to understand your choices, how they will protect you, and try to estimate your future needs.