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Is There A Diffent In Whole Or Ordinary Life Insurance.

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Is There A Diffent In Whole Or Ordinary Life Insurance.

Postby Maoltuile » Sat Aug 12, 2017 10:33 pm

Huge difference...assuming you mean ordinary life insurance is Term


Cheap when you're young, extremely expensive when you're old

Doesn't build any cash value

Can't be used as a tax shelter (depending on where you live)

Eventually expires at a certain age (ussually 80 or 85)

Good for a temporary need like debts, making sure your kids get through school if you die when they are young, etc.

Whole Life:

Cost stays the same for your entire life (in the short term it is more expensive than term, in the long run it is FAR cheaper)

Builds cash value (if you canel it you get some money back, or you can use the cash value as collateral with a bank, or borrow against it)

you can use it as a tax shelter (one of very few legal tax shelters endorsed by Revenue Canada...not sure about other countries)

Doesn't expire...good for you whole life (some expire at age 105, but really how many people live that long?)

Some have the option of "limited Pay" where you only make payments for a limited number of years.

Good for long term/perminent needs that will be there whether you die tomorrow or 50 years from now, such as funeral expenses, final taxes, probate fees, legacy funds, etc.

Simple comparison:

Term is like renting a house...it's a shortterm fix for a temporary need, where you build up no equity and eventually you move after a certain period of time. Every few years the landlord (insurance company) might bump up the rent (premium) on you. When you move out or when the landlord kicks you out (around age 80 or 85), you hand back the keys (the policy) and say thanks to the landlord for helping me out for a couple years and you get nothing in return.

Whole life is like buying a house...it's a more longterm solution, where you build up equity and it's there for ever.
It's also a more stable solution as well.
Once you buy the payments are far less likley to go up and if you have a mortgage (limited pay option), you pay for a certain number or years and then you keep the house after that.
If you ever decide to move (cancel the policy), you get some money back out of the deal from the equity you put in.

Both term and whole life have a purpose depending on your needs and reason for buying insurance.
In my opinion anyone that flat out says buy one or the other without exception (especially given the vague nature of your question), should not be used as a reliable source of information.

Contact a licensed insurance broker that offers both term and whole life.
They will be able to show you the differences and do a needs analysis to determine which is right for you.
In some cases it's a mix of both (A little W/L for the funeral, and a little term for the debts typ eof thing).
In dealing with a broker they will also be able to offer you a wider variety of products to make sure you not only get a product that suits you, but you get the best price on the market, unlike a 'one trick pony' that will squeeze your situation into a predetermined mold to suit the only product they offer.
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Joined: Mon Jan 13, 2014 12:05 am

Is There A Diffent In Whole Or Ordinary Life Insurance.

Postby Humbert » Sun Aug 13, 2017 2:05 am

Whole vs term?? A huge difference!

With whole life, you?re paying $X/month for your entire life. With term, you?re only paying it for a set term.
Whole life is a rip-off.
Never buy anything but term.
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Joined: Fri Feb 14, 2014 1:42 pm

Is There A Diffent In Whole Or Ordinary Life Insurance.

Postby Alured » Mon Aug 14, 2017 8:02 pm

NO....'ordinary" and "whole" are interchangeable.
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Joined: Sun Mar 09, 2014 6:48 am

Is There A Diffent In Whole Or Ordinary Life Insurance.

Postby Cord » Mon Aug 21, 2017 10:52 am

I think you mean whole or term. And the answer is YES.

Whole = Whole Life, you are covered for your whole life.

Term = coverage for a certain term. If you buy a house for 200K and want to be sure if you die your spouse will get the house free and clear, you take out a 200K term policy for 30 years. The longer you live the more cash your spouse will keep. After 30 years, you have no coverage and will need to re-up a new policy.

Contact an insurance person to get exactly what you need. They are not the shady back room sales guys of the past. Good luck... http://www.tenantinquiry.com
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Joined: Fri Mar 14, 2014 12:42 pm

Is There A Diffent In Whole Or Ordinary Life Insurance.

Postby rodman » Tue Aug 22, 2017 7:48 am

Insurance Pickle is right.
Ordinary life insurance is the same as whole life insurance, just different phrases.
Ordinary life insurance is just a very uncommon term, so it confuses a lot of insurance professionals who have never heard the term before.
I actually didn't now, so I double checked (see my source).

However, I wanted to praise Chris C because he did such an exceptional job of explaining the primary differences between term and whole life (even though that wasn't the question) and he used a fantastic and clever metaphor, as well as providing solid advice as opposed to Dizzy_Lizzy who said that whole life is a rip off and is obviously very ignorant in the subject matter.

Dizzy_Lizzy, the reason why you pay for whole life your entire life is because you have coverage for your entire life.
With term insurance, once you stop paying for the policy, you lose the coverage...so if it becomes too expensive at age 50 and you stop paying for it, you just don't have life insurance anymore.
I'd suggest you go talk to a licensed professional about life insurance and educate yourself.
If you want a policy where you only have to pay for a set term (ie 20 years) whole life insurance can be structured that way, but you still get to keep the policy.
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