Whole Life Insurance vs Term Life Insurance - Which Is Better?
When you are looking to invest in the future
for your loved ones, there is a great deal that needs to be thought
out. One thing that you must consider in terms of caring for your
dependents is life insurance; there are many facets to this problem
that must be thoroughly thought out. As you shop for life insurance,
one question that you will routinely face is the question of which
is better, whole life insurance vs term insurance?
This question is a very important one to ask, and simply put,
there is no one right answer for everyone; if there were, there
would hardly be a choice! Both of them have aspects that recommend
them, and the only way to make a good decision between the two
is to find out all the facts.
Term life insurance is a policy where there is only life insurance
coverage. Upon the death of the individual insured, the value of
the policy is paid to the beneficiary. Contrast this to a whole
life insurance policy, where there is the added benefit of an investment.
The later builds up cash value that can be borrowed against. While
term life insurance is less expensive, you can also see that it
is less versatile.
One of the main emphases of whole life insurance is what agents
like to advertise as forced savings. Whole life insurances are
often pushed as a way to plan for retirement. The investment will
yield dividends that can be spent in the person's lifetime.
There is also the question of what kind of policy is available
for you at any given time. Term life insurance is widely available
up until you are in your fifties or sixties. Term life insurance
up until this point is relatively cheap and easy to find. As you
get older, however, you will find that the insurance companies
prefer to try to sell you whole life insurance. While this does
not mean that younger individuals cannot get whole life insurance,
or that older individuals cannot receive term life insurance, it
does give you something to think about in terms of availability.
The biggest effect that term versus whole life insurance will
have on you is the cost. Term life insurance, with it's simple
structure is invariably the cheaper option, but depending on your
situation, whole life insurance can be a benefit to you and your
family. Keep in mind that whole life insurance in an investment
and as such, needs to be thoroughly checked out before you put
your money into it. Check on what the yield of your investment
will be after all charges have been figured. As you take a look
at the policies available, remember to check the ratings of the
companies you are considering.
When making a decision as important as deciding on your life insurance,
make sure you go into it with both eyes open! Do your research
and find out which policy will work best for you.