Life Insurance Term Verses Whole – Is Term Life Insurance Better Than Whole Life?
Term life insurance is term insurance, which is one kind of life insurance. They are both policies with premiums, coverage duration, and guaranteed death benefit. The difference between term life insurance and whole life insurance is that whole life plans have a cash value that grows over time and the policyholder usually pays no taxes on the cash value accumulation. Term Life Insurance generally has a fixed premium payment throughout its period of coverage. In contrast, Whole Life Insurance generally has a deferred premium payment schedule that can last from 3-30 years.
Universal life has a death benefit that is guaranteed for the policyholder's beneficiary (children, other dependents, and estate). However, when the policyholder dies the cash value in the whole life insurance plan is distributed to their beneficiaries according to the beneficiary's needs. Universal life insurance also has the option to own an investment component, such as an equity index fund, that is separate from the insurance plan. When you invest in this component, the cash value grows tax deferred.
A Whole Life Insurance policy has a guaranteed death benefit that remains constant throughout the term of the policy. There is no cash value associated with a Whole Life Insurance policy. This is why many policies will have a savings account attached to it where you can save money for your children's education etc…
For example: Let's say I turn 34 and I decide I want $500,000 of coverage by age 65. If I were to purchase a 20-year policy at $2,500 per year ($166.67/month) it would cost me about $27,000 to purchase that coverage and the total premium paid would be comparable as a Whole Life Insurance policy.
If you decide you want more or less coverage than out example above you could adjust the premium amount accordingly to change your future death benefit. Just remember that if you increase your coverage amount by purchasing additional policies on yourself, the rules for Life Insurance Claim will change slightly. For example: It is extremely common for people with long term term life insurance policies to add additional cash value policies on themselves every 5 years or so as their insurance needs change.
If you are young and healthy, life insurance rates are usually higher for the first 5 years. The rates do not change so drastically from this point on as they would if you had a policy with more than 10 years left. You can still generally find lower rates even after that 10 year point but it is quite rare to find ones that do not increase at least by 1% per year.
There are special discounts available for buying term life insurance as compared to whole life; just as there are special discounts available for buying whole life insurance over term. If you already have a policy that has less than 10 years left, it is possible to cancel the entire insurance contract and start over with a new policy.
There are also some differences between term life insurance and whole life insurance, depending on the kind of term life policy you buy. For example, if you buy universal life insurance, the policy is generally more flexible in terms of your investment options; because this kind of policy allows for more flexibility in managing your financial assets. You can invest in a variety of investments that generally do not incur taxes such as: precious metals, Liberty funds, mutual funds, index funds and similar investments.
Whole Life Insurance can be a great solution for budget conscious individuals or for those who feel comfortable managing their own investments through index funds, mutual funds, index exchange traded funds (ETF's), etc… However, if you are fairly young and if you are planning on doing something really crazy with your money like buying a boat or a fancy car then you should probably stick with term life insurance.
The death benefit for whole life insurance is calculated based on the amount of money that has been paid into the policy (principal) plus any additional paid in premiums. This is why it is important to do the calculations before making any decisions.
When looking at a whole life insurance policy, always be sure to do the math. Ask yourself questions like: How much would it cost for me to replace this coverage if I purchased something else? What is my current investment situation and does it make sense for me to cancel everything and purchase a policy? If you get sick now how much will it cost me out of pocket in medical bills? How much would it reduce those costs if I had insurance coverage?
Is Term Life Insurance Better Than Whole Life Insurance? It really just depends on your individual situation and goals. If you have the extra money, and you feel comfortable investing in the stock market, Universal Life Insurance might be a great option for you. If not, then Term Life Insurance may be a better option. Remember that there are also several discounts available to purchase term life insurance if you already have an existing policy.
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Life Insurance Basics – The First Step to Making the Right Buying Decision
By: Jason Williams on Fri, Jan 19, 2017 in Life Insurance, Uncategorized with 0 Comments
In order to minimize your stress after the loss of a loved one and ensure you are properly protected for your family's future, take time to educate yourself about life insurance. There is a lot more involved than just buying the cheapest policy you can find. Here are some basic principles that apply to all types of life insurance. They will help you make the right decision when it comes to purchasing a policy and collecting benefits if something terrible happens.
Choose your own beneficiaries wisely. I know this sounds obvious, but it's easy to overlook this important step. It can be really important that you choose who you want to receive your death benefit. If the person you trusted with your financial future is not fully aware of your death plan, they have no way of knowing what will happen or how to act if and when a tragedy occurs.
I know this sounds obvious, but it's easy to overlook this important step. It can be really important that you choose who you want to receive your death benefit. If the person you trusted with your financial future is not fully aware of your death plan, they have no way of knowing what will happen or how to act if and when a tragedy occurs.
Conclusion. How to Find a Good Life Insurance Agent and Not Get Burned
By: Jason Williams on Tue, Nov 29, 2016 in Uncategorized with No Comments
9 Tips for Finding an Agent You Can Trust
The life insurance agent you choose will have a significant impact on your experience. If you want to ensure that you come away with the best coverage and experience possible, it's important to do your homework before making a commitment. Here are nine tips for finding an agent you can trust. 1. Get recommendations from friends and family. 2. Check out their reputation online . Check out review sites such as Yelp or Glassdoor . 3. Do some research on the company they work for . 4.