January 7, 2015

What defines the difference between whole life insurance and term life insurance? If needed, which option is best for most people? Why?

5 thoughts on “January 7, 2015”

  1. Kat Graham says:

    Whole life insurance has high fees to pay the salesperson. Term life insurance has lower fees & is the better option between the two, so if you need life insurance, you should buy term.

  2. MIke Dunlop says:

    The major difference between a whole life insurance policy and a term life insurance policy is that the whole life policy contains an element of investment and a term life insurance policy is only an insurance policy. A whole life policy is an expensive investment vehicle with low returns and high fees. A term life insurance policy typically is more reasonable in price with respect to a whole life policy. If insurance is deemed to be necessary, people can usually do a much better job of buying a term policy and investing in another vehicle such as an index fund that will typically generate higher returns at lower costs.

  3. MIke Dunlop says:

    An additional fundamental difference between the two type of policies is that a term life insurance policy covers a set number of years for your life. You pay a premium for a set number of years and the policy covers you for those years. When the policy expires you get nothing in return. A whole life insurance policy covers you for your whole life, as long as you continue to pay the premiums(which tend to be MUCH higher than term life insurance premiums). When you die your family or beneficiary gets the death benefit.

  4. Garrett Haag says:

    Whole life insurance is the insurance industry trying to mix two things that should not be together, investing and life insurance. They sell it as a mix of an investment and protection but it is not a very good version of either. The whole life insurance can be very expensive and does not net a very good return when looking at it as an investment. Term life is the basic life insurance product that people who need coverage should get. Term gives you coverage for a amount of time or the term depending on how long you want it. You should only get the insurance if you need it, if no one is depending on you for their welfare then you likely do not need it and would just be wasting your money on it, your cat does not need to be left a settlement. If you want an investment go to Vanguard and buy an index fund and if you want life insurance go to term4sale.com and get a policy. Do not mix the two and get a whole life policy.

  5. Mike Finley says:

    Nice work everyone. Let’s review.

    (1) If you need life insurance, buy term at an online clearinghouse like accuquote.com or term4sale.com.

    (2) Do not invest in whole life insurance. It’s expensive and produces poor results.

    (3) Those poor results come from the high fees that are used to pay their “helpers” who sell the products.

    (4) Stay far away from life insurance agents. They want to sell you life insurance that is part investment. They make a lot of money off these poor investments.

    (5) Learn more about this issue by hitting on the insurance needs tab on this website. Onward!

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