Difference Between Term And Whole Life Insurance

LIFEINSURANCE PROTECTS YOUR FAMILY,ITIS NOT AN INVESTMENTOPTION TERM OR WHOLE LIFE ? LIFE INSURANCE Term life insurance provides protection for specific and chosen period of time (5,10,20 or 30 years) Best suited if you have long term need for life insurance Whole life insurance TERM WHOLELIFE provides protection for Coverage ends when your policy expires. Premium INSURANCE may increase with age. INSURANCE your entire lifetime and accumulates a cash value that the policy holder can borrow aginst Best suited for family protection against financial hardships in the event of your death OR if your are under-insured and want to supplement Initially premiums are higher than term insurance. Premiums do not increase with age. your coverage If you are young and have inflow income for many years to come and healthy then go for term insurance to give a protective financial layer in f your death HOW TO CHOOSE? If you are looking for long term retirement planning and also WHOLELIFE want a guranteed death benefit along with investment option then whole life insurance may be the right answer TERM case Age affects your premium, as mortality charges increases with Whole life insurance offers guaranteed death benefit along with cash value Which one suits you? Term OR Life ? age. Smoker/Non Smoker Non smokers have higher life expectancy If you are under 45 years of age then a term insurance might be a good choice for you considering a term of 30 years. In the later years of your policy you cam borrow the cash value for down payment of your home. Gender affects Eхаample:- If you need $50,000 for college fees and your youngest child will graduate in next 3 years then you need $50,000 of term insurance as a short term hedge against your death. Thus, ensuring that your child can finish education. However if your estate will owe $300,000 in taxes at your death, then you probably need whole life insurance because you are not likely to die in the next 20 years. premium. Many consider women to have longer life hence low premium. In a term plan you pay for pure death benefit protection Personal Health: Person having previous ill health history may be charged higher premium or may be Term plan does not have a cash value component associated with it. Phasellus volutpat, Employment: Riskier jobs like miners higher premium. sem sed venenatis egestas, mauris uma LIFE TERM INSURANCE CONCEPTS INSURANCE WHOLE LIFE and UNIVERSAL LIFE TERM INSURANCE Term insurance comes in three Whole life insurance is also CASH VALUE known as permanent life insurance. types: Level Premium, Annual Renewable and Decreasing Term It provides guaranteed return as death benefit. Understanding CASH VALUE ? In Level premium: The premium remains same for the entire term If a 25 year old man can invest $100 each month on whole life insurance of the policy which can be 5,10,15 or 30 years. Whole life insurance policies are far more expensive than term policies mainly due to the cash value component attached to them. then he can get a cover of $125,000 for his family. The basic idea is to accumulate savings for retirement. This is the basic attraction of cash Annual Renewable: This policy is renewable each year so the term of the policy is one year. Generally the premium increases each year in this type of plan. value concept. However, if the same guy purchases a 20 year level term insurance for a cover of $125,000 then the premium will only be $7 and not $100. Partial withdrawl benefits in times of financial emergency from cash value accounts during later years of policy. Decreasing Term: Premium remains the same throughout the term but the death benefit Now you must be thinking that you have saved $93 which is not the case due to heavy expenses incorporated into the plan. Fat commisions to the agents is a part of this. For the first three years in a whole life policy dont even expect any return due to expenses and commisions. Also note that the incase of your death your family only gets the face value ($125,000) only. Nothing from cash value savings. decreases over time. Whole life insurance is like owning a home while term insurance can be compared to renting a house. Term insurance is a need based insurance policy where you are covering your family till retirement however the ROl on such policies is poor considering that you get the death benefit only if you die during the term. In whole life insurance you can increase or decrease your premiums within specified limits www.healthandautoinsurance.org Insurance Tips, quotes, advice and more...