Posted in Life Insurance Questions about 1 month ago, 6 replies
I am finally taking my dad's advice and getting some life insurance. Which is better? Term or whole life?
Ron's chart is very useful. One thing to ask yourself is, "How much can I afford per year?" If your budget only allows a few hundred dollars then term life insurance is probably best for you. Why? Because no form of life insurance is good if you let the policy lapse because it becomes unaffordable. Permanent policies are 3x's more expensive then term life insurance.
Thats also very good and prudent advice that Byron has added about budget and ensuring you can afford the policy for the life of the policy.
Term Term Term. Whole life and Universal life are designed to make the Insurance companies $$ not you. The Purpose of Life Insurance is only to provide $$ to your family to take care of your financial obligations. If no one is relying on your income you don't likely need much. Focus on keeping your investments and your insurance seperate. If you take the savings from Term plans over Whole or Universal for the same dollar amount and then invest the difference, you will be further ahead financially. I know this because I used to work for these companies. Who ever sells you a Whole or Universal policy makes a boatload of money compared to Term. This is because they make the companies much more money.
I'm really ignorant when it comes to life insurance. I've gotten some good information here. My question becomes - what are the tax advantages? I am 45 years old and have a life insurance policy through my work. But I want more, something to leave my son and his family. I want the most for the least amount of monthly payments. Help!!
That's the same here. I knew I wanted more insurance and that's what I did. Now I'm wondering if I made the proper decision. I already had term life through my job. I recently updated my insurance and added whole life, did I do the right thing? From reading the comments and reading Suze Orman book, term life is better. I probably won't get that much money from whole life over the years worth paying for. I should just save this amount every week. I'm 40, married, and have 2 boys 10 and 13. Please advise.
No one life insurance product is better than the other and you'd be best served to talk with a specialist who can help you to determine what is best for you based on a variety of factors.
Attached is a chart we put together describing the differences between term, whole, universal and variable. (Click here for the large version of the life insurance comparison chart.)
Feel free to contact me via the contact form if you want some help with your decision.