Answer
Jun 18, 2018 - 07:18 AM
Term life insurance premiums are only there to provide a death benefit to your beneficiaries if you die during a specified term (usually good for people with particular preexisting conditions).
Investing in whole life insurance premiums builds cash value that you can use later in life or that will add to the death benefit payout.
Deciding whether to purchase whole life or term life insurance is a personal decision that should be based on the financial needs of your beneficiaries as well as your financial goals. Life insurance can be a very flexible and powerful financial vehicle that can meet multiple financial objectives, from providing financial security to building financial assets and leaving a legacy.
Here are some of the main features of term and whole life insurance.
Features of term life insurance:
1. Provides death benefits only
2. Pays benefits only if you die while the term of the policy is in effect.
3. Easiest and most affordable life insurance to buy.
4. Purchased for a specific time period, such as 5, 10, 15, or 30 years, known as a “term”
Becomes more expensive as you age, especially after age 50.
5. The term must be renewed if you want coverage to be extended beyond the term length.
6. Can be used as temporary additional coverage with a permanent life insurance policy.
7. Can be converted to whole life insurance
Need Term Life Insurance?
Features of whole life insurance:
1.Covers your entire life.
2. Provides death benefits as well as a cash value accumulation that builds during the life of the policy.
3. You typically must qualify with a health examination.
4. Can be purchased without a medical exam, but at a higher cost.
5. Takes 12 to 15 years to build up a decent cash value.
6. Can be a good choice for estate planning.
7. Cash value is based on how much the return on investment is worth.
8. A portion of the cash value can be withdrawn or borrowed during the life of the policy.
9. Initially has more expensive premiums than term life insurance, but can potentially save you money over the life of the policy if in force for a considerable number of years.
A knowledgeable life insurance agent can help you evaluate each of the following aspects of your circumstances and determine whether term life or whole life is a better option for you.
The factors to consider include:
1. Your current age
2. Current state of your health
3. Financial needs of your family
4. Plans for funeral and death expenses
5. The age of your children
6. Long term health expenses in the event of a serious illness
7. Your mortgage and current debts
8. When you plan to retire and the retirement plan you have in place
9. Future needs of your family, such as your children’s college tuition.
10. Your need for an additional retirement savings plan
11. Your plans and concerns regarding setting up an estate and ramifications for estate taxes
12. Your intention to set up a trust as part of your will
14. Whether you want to donate life insurance proceeds to a charity
15. Your feelings on potentially paying into a term policy and never receiving any of that value back
16. Hypothetically, if you are 35 years old, have young children, and are the primary income earner in your household, you might want to consider buying a term life policy that would fully cover your family’s financial obligations.
Investing in whole life insurance premiums builds cash value that you can use later in life or that will add to the death benefit payout.
Deciding whether to purchase whole life or term life insurance is a personal decision that should be based on the financial needs of your beneficiaries as well as your financial goals. Life insurance can be a very flexible and powerful financial vehicle that can meet multiple financial objectives, from providing financial security to building financial assets and leaving a legacy.
Here are some of the main features of term and whole life insurance.
Features of term life insurance:
1. Provides death benefits only
2. Pays benefits only if you die while the term of the policy is in effect.
3. Easiest and most affordable life insurance to buy.
4. Purchased for a specific time period, such as 5, 10, 15, or 30 years, known as a “term”
Becomes more expensive as you age, especially after age 50.
5. The term must be renewed if you want coverage to be extended beyond the term length.
6. Can be used as temporary additional coverage with a permanent life insurance policy.
7. Can be converted to whole life insurance
Need Term Life Insurance?
Features of whole life insurance:
1.Covers your entire life.
2. Provides death benefits as well as a cash value accumulation that builds during the life of the policy.
3. You typically must qualify with a health examination.
4. Can be purchased without a medical exam, but at a higher cost.
5. Takes 12 to 15 years to build up a decent cash value.
6. Can be a good choice for estate planning.
7. Cash value is based on how much the return on investment is worth.
8. A portion of the cash value can be withdrawn or borrowed during the life of the policy.
9. Initially has more expensive premiums than term life insurance, but can potentially save you money over the life of the policy if in force for a considerable number of years.
A knowledgeable life insurance agent can help you evaluate each of the following aspects of your circumstances and determine whether term life or whole life is a better option for you.
The factors to consider include:
1. Your current age
2. Current state of your health
3. Financial needs of your family
4. Plans for funeral and death expenses
5. The age of your children
6. Long term health expenses in the event of a serious illness
7. Your mortgage and current debts
8. When you plan to retire and the retirement plan you have in place
9. Future needs of your family, such as your children’s college tuition.
10. Your need for an additional retirement savings plan
11. Your plans and concerns regarding setting up an estate and ramifications for estate taxes
12. Your intention to set up a trust as part of your will
14. Whether you want to donate life insurance proceeds to a charity
15. Your feelings on potentially paying into a term policy and never receiving any of that value back
16. Hypothetically, if you are 35 years old, have young children, and are the primary income earner in your household, you might want to consider buying a term life policy that would fully cover your family’s financial obligations.
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