Several insurance professionals advise people to purchase both whole and term life insurance policies. Is this a good idea? Is this true or is it bogus information? If it is, why is it and who is it right for? We’ll look at this in this article…
It is important to explain the difference between both policies so that you fully understand, before we begin: As long as you keep up on your premiums, you can have whole life insurance forever. Whole life policies provide cash value. You can take out a loan against it. You also have the option of cashing in your policy at any time. It has very many advantages. However, it’s also very expensive.
If you desire coverage for a particular number of years then consider term life which will give you insurance coverage for 1 ? 30 years. No cash value accumulates from this kind of policy. During the period that you choose, term life will present you with standard insurance. If you don?t pass away during your set term then you get nothing. If you pass on within the chosen term, they get paid the coverage amount you bought. Because of its very limited features, it gives much more coverage for each premium dollar paid.
Keeping these two policy differences in mind, we can advance…
Primarily, you should know that my advice to you is no nonsense and very useful. But, since every situation is different it will be up to you to come to a decision for your best interest.
Normally, it is advised that whole life is purchased when you are a young adult. You?ll generally get the best rates in your younger years. It is important to make sure that you purchase sufficient coverage. Furthermore, you’ll be able to build cash value.
Term life is a policy that you would purchase when you begin to develop some risk. What I mean by this is once you have a family and a house note, people start to rely on you and daily you are exposed to more risks as part of everyday life.
Some disagree, they say that your kids will grow and move out, your house note will get paid off and whole life is a better option.
The cheaper option is obviously term life in terms of getting your money?s worth but remember that it is only for a specific amount of time. All you have to do is to buy a policy that has a term long enough to cover such a period when you would need life insurance the most.
Imagine that you have several years left on your mortgage and a young family. You want to provide for your children and offer them educational options as well as ensure that your family is always provided for in the manner that you have given them, so this will cost somewhere in the ballpark of a million bucks. Throw in the half million that you owe on your mortgage that won?t be satisfied for another 25 years.
All you’ll have to do is get a term life policy for $1.5 million for a 25 year term. This offers a nice shield of protection for your family during that time when your kids are young and your house is not paid off.
In the event that you outlive your term policy then you fall back on your whole life plan. It is always a relief to know that when you are the most vulnerable that your family is covered.
Be clever. Compare prices by shopping around. Get a bunch of different quotes from several insurers. Hopefully, the total you’ll pay for this combination will be much less than you thought.
