The difference between term and whole life insurance

The Difference Between Term and Whole Life Insurance

The difference between term and whole life insurance is a matter of time.

Specifically, Term Life Insurance is what we call “IF” life insurance, Whole Life Insurance is what we call “When” Life Insurance. Meaning that Whole Life pays into your 80’s or beyond when you would pass away as opposed to term life insurance which pays if you die prior to your statistical mortality when you are young.

The main difference between term and whole life is that term will pay in the unlikely event that “if” you die within the 20 or 30 year term of coverage you take out assuming that you took the term out in your 20’s 30’s or 40’s.

Whole life will pay “when” you are more likely to die in your 70’s, 80’s or beyond.

This is why there is a big difference in cost between term and whole life insurance, whole life will statistically pay and it is unlikely that the term life insurance will ever pay.

This is not to say that either is a bad investment. Term is crucial for anyone wanting to protect spouses and children against the loss of a primary income earner. Buy term and invest the difference is the motto of many financial planner and it is a good one. Buy a minimum of 8-10 times your annual income worth. It is cheap and well worth it. 62% of individuals say they need more life insurance, don’t leave your family unprotected. For what it costs it is foolish not to have term life insurance.

Some argue that term life insurance is a waste of money. Maybe so. But think of your family without an income or you to help them. Buy term invest the difference, or if you don’t like the thought of wasting money on something you are very unlikely to use consider a return of premium policy. This is a term policy wherein you get all of your money back at the end of the term, it is more expensive but some of them actually have decent returns for a guaranteed product.

Whole or permanent life insurance is more suitable for people subject to either the estate tax or in very high tax brackets, don’t buy whole life unless you are one of these individuals.

Go to http://termratequote.com/ for all of your term life insurance needs. They have great rates on Term Life Insurance and can get you covered quickly with a minimum of hassle.

If you need whole life insurance a 412 I Fixed Defined benefit plan or financial planning? Go to http://fpaspen.com/

Need a Life settlement? http://lifesettlementaspen.com/

If you are charitably inclined and want to know more about planned giving go to http://centerforplannedgiving.org/

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