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What is the major advantage of term life insurance over whole life insurance?

September 1st, 2010 | | Tags: , , | 8 Comments | |

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8 Responses to “What is the major advantage of term life insurance over whole life insurance?”

  1. TKH1401 Says:
     September 1st, 2010 at 9:48 pm

    hi,
    the preimium of term life insurance lower than compared to whole life ins and every persons must hav term life as equal to your life value and as we know what is our life value, it is more than anything, so insures as much as possible, your dependents need this incase of any unhappy happend to you.
    hope my answer will help you.

  2. Sharon T Says:
     September 1st, 2010 at 9:48 pm

    Lowest cost which permits higher coverage.

    If you want to invest for your future, do it elsewhere. Whole life insurance or any of the fancy products developed in recent years are designed to pay agents and the company very well.

  3. Judy Says:
     September 1st, 2010 at 9:48 pm

    Google:
    Suze Ormon – Why I hate whole life insurance.

    Stick to term – everything I have ever read or heard will tell you that term life is the way to go.
    Whole life is profitable for the person that sells it to you – be careful whom you trust.
    /

  4. Rick B Says:
     September 1st, 2010 at 9:48 pm

    Well, you pay for insurance to pay off in the event of death. you do this at the lowest price you can. that is what term is all about.

    Whole life tries to include an investment account rolled in with insurance. Why would you want to pay a life insurance agent to invest your money and roll all that in with life insurance? That will give you higher costs, lower return on your investments, more complex rules and fees, etc.

    Buy term and invest the extra money in stocks, bonds, CDs, Savings, etc, (investment vehicles).

  5. mbrcatz Says:
     September 1st, 2010 at 9:48 pm

    Price. It’s a heck of a lot cheaper.

  6. vincent Says:
     September 1st, 2010 at 9:48 pm

    you want to get term insurance while you are preparing yourself for the future.buy term and invest the difference in mutual funds for a period of 30 years at 12% average and at the end you will have aproximately 2.3 million dollars,your house will be paid for,your kids are out of the house and no debt,then you wont have the need for life insurance.listen to suze orman and dave ramsey.they are awesome.if you want more information feel free to contact me at thisblueman@yahoo.com
    have an awesome day!!

  7. Jag Says:
     September 1st, 2010 at 9:48 pm

    The major advantage is that term life insurance is way cheaper than whole life (approx. 15% of what you’d spend on whole life). Since it is cheaper, you can afford sufficient amount as per your family needs.

  8. rcdrury Says:
     September 1st, 2010 at 9:48 pm

    Of course, the standard mantra is that term is less expensive. A bicycle costs less than a new automobile, but it may not efficiently get you to your destination. The same is true with life insurance.

    Whole life is permanent coverage, intended to remain in force until death. People often claim that whole life is more "expensive" than term, when in reality, it simply carries with it a premium commensurate with a guaranty that it will definitely pay a death benefit provided it is kept in force; while far less than one percent of term policies pay a benefit.

    Keep in mind also that there are other types of permanent coverage that can be more cost effective than whole life. The bottom line is to determine the objectives the insurance is intended to meet and obtain the most suitable coverage. "Cheaper" does not always mean more cost effective; and it definitely doesn’t mean better. The only proper way to obtain life insurance is to consult with a properly qualified financial planner or advisor.

    BTW, there is no better way to disqualify a financial answer than to cite Suze Orman. I don’t know if I’d trust her to balance a checkbook. Also, keep in mind that whole life is an insurer’s least profitable life insurance product. They have no incentive to sell it except that it is often the right thing to do.

    Added in response to Rick B’s comments:

    Few things disturb me more than to hear whole life (or any permanent life product) described as life insurance with a savings or investment plan attached. This is a misrepresentation stemming from the practices of incompetent and/or unethical agents.

    The purpose of cash value in a life insurance policy has nothing to do with "savings." It is simply the result of averaging expense charges over the insured’s lifetime in order to arrive at a level or predictable premium. Granted, there are financial strategies that can make saving through cash value appealing, but these are not practices to be used with the typical client, and it’s usually more appropriate that universal life contracts are used for such purposes. In any case, this still isn’t the primary purpose of cash value.

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