Which Is Better – Whole Life or Term Life Insurance?
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When it comes time for you to consider buying life insurance, you will want to buy life insurance that will meet your needs the best. This means that you will need to consider term vs. whole life insurance. They are quite different in how they work and in costs, too.
Term life insurance is clearly the more affordable option of the two. It will cost considerably less than whole life because it has very little in the way of commissions and other costs built in to it. It is pure insurance and it has no frills. It is purchased in terms of a set number of years, such as five years, ten, twenty, and up to thirty years. At the end of that time, the cost will probably greatly increase due to the new age, but you may also convert it to a whole life insurance policy if desired.
A whole life insurance policy is insurance with a cash value, or savings element, built into it. This means that part of the premium goes into a savings portion of the plan and accumulates after several years. This cash value portion may be borrowed, but it will reduce the face value of the policy if the insured dies without it being repaid. This amount also receives interest charges which are also subtracted from the face value.
The cash value could be good at a time when the insurance is not needed. However, if the insured dies, only the face amount will be received by the beneficiaries, and not the cash value portion on a standard whole life policy.
Term insurance is the much cheaper option, and a much larger amount of life insurance can be purchased with a smaller premium. Many financial experts recommend that term insurance be purchased and that you create your own savings plan, and you will receive a better return than you would get from a whole life insurance policy.
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Term life insurance is clearly the more affordable option of the two. It will cost considerably less than whole life because it has very little in the way of commissions and other costs built in to it.
I recently got married and my wife and I found term life much more affordable. Buytermlife.com has a Term Life Insurance Calculator that helped explain things, since it was the first time I had looked at buying life insurance. I recommend it as a good place to start.
I went to the link posted from the above comment, http://buytermlife.com/, and found them to be very helpful. I was able to find a term life insurance policy that was actually affordable. Highly reccomended.