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Life Insurance - Whole Life Or Term Life, Which Is Better?

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Life Insurance - Whole Life Or Term Life, Which Is Better?

Postby Dwayne » Wed Mar 05, 2014 8:48 pm

Whole life.   rhine44 36 months ago
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Life Insurance - Whole Life Or Term Life, Which Is Better?

Postby Fabrizio » Thu Mar 06, 2014 6:15 am

In general, a whole life policy is better. In a specific instance, term is better, and that instance is how "Primerica" made their business: have the customer BOTH begin investment in mutual funds(which is what banks invest your savings in anyway) AND buy term life insurance. The point is that term is much cheaper. Yes, it expires. The plan is that by the time it expires, the customer has also been building up an investment, such that at the expiration of the term insurance, there's the sizeable stock market investment to replace it. The customer is covered over the entire span, by one or the other. But if you don't have a reasonable replacement working up, it really can end up being a waste of money.   danielpauldavis 36 months ago
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Life Insurance - Whole Life Or Term Life, Which Is Better?

Postby beldene » Sat Apr 12, 2014 11:08 pm

Term. The rest is an expensive investment scheme.   Gary4books 36 months ago
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Life Insurance - Whole Life Or Term Life, Which Is Better?

Postby Pierrepont » Mon Apr 14, 2014 5:03 pm

None are better than the other. It depends on what you need the insurance for and how long you need it.There is a tremendous paradigm in the market place today that permanent insurance is an investment. It is not an investment. Life insurance has never been an investment. But, some financial guru's have decided it is and that it is a poor one. They do this because they want to try and sell you something else.You can not compare any kind of life insurance to an investment. You can't compare it to something it is not.Here are some things to keep in mind.All life insurance is term insurance. It is just the way it is priced that gives each type its distinction.1. Term insurance. 1 year renewable term. Premium goes up each year. 5 year level term. Premium goes up every five years. The same with 10 year, and 20 year term. 30 year level term may or may not renew depending on how old you are when the policy was issued.2. Universal life insurance. This is a one year renewable term product inside a policy that allows you to make level premium payments over your lifetime. If you overfund this policy within the Modified Endowment contract guidelines, you may be able to stop premium payments at age 65 or 70. The danger here is poor investment or interest rate performance, or the withdrawal of money in the early years causing lack of funds to support policy in the future and prevent you from stopping premium payments.3. Whole Life insurance. This is level term to age 100 or 110. The product is priced to allow for level premium payments over one's lifetime. If the company pays dividends, there is a possibility, just like universal life to stop premium payments in the future. But poor dividend performance or policy loans can prevent this from happening. This product has cash value, but it does not compare to an investment.So which is best. Term insurance was originally designed for the businessman who borrowed money for his business. Banks wanted some kind of guarantee that if the business owner died, the money would be paid back. Thus five and ten year business loans were usually covered with five and ten year level term. Later on insurance companies expanded the product to cover the family as well with renewable and convertible level term products.Universal life is a great second policy. It allows for cash accumulation, but if it is additional insurance in your portfolio, you don't have to worry as much about the policy lapsing later in life. Here you can have access to money if you need it. You can withdrawal your principal and then borrow the interest with no tax implications as long as the policy is in force.Whole life is for income replacement while working and as retirement asset protection when retired. If you want to make sure you can use retirement dollars to live on and still pass wealth to spouse and children, whole life is the safest way to go.So to answer your question, it just depends on what you need the insurance for and how long you want it.Of the three types, term insurance can be the most expensive if not used correctly.   WEALTHADVISOR 36 months ago
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