When comparing a whole life insurance policy to term life insurance, you will find that term life insurance will make a better investment. A term policy will provide life coverage only. This term policy will pay the face amount of the policy upon the death of the insured to the beneficiary. You can purchase term policies in periods from one year to thirty years. Whole life insurance is more expensive and it differs from term life insurance because it combines a term policy with an investment component like stocks or bonds. With a whole life insurance policy, you can borrow against it when it builds cash value.
Whole life insurance is still not a bad idea for wealthy people. Whole life insurance can be used in estate planning. Whole life insurance policies hardly ever yield a reasonable return. However, they can provide a decent return on investment if they are held for a period of twenty years or more. Most whole life insurance policies usually do not start to build cash value until twelve or fifteen years.
It is better to have life insurance, whole or term, than to be caught without it. When a death occurs and the person has no life insurance coverage at all, this can put a heavy financial burden on the family. Investing in life insurance will make a great future investment for your family in the event of your death because it can be used to pay for funeral expenses, and the family can use the rest to pay off bills, open a savings account, pay the mortgage and more.
If you are interested in buying life insurance, then you can contact a life insurance agent or broker online, by phone, or in person at a life insurance office. A life insurance broker can get you a better deal be offering because they have close contacts with those life insurance companies who offer discounted rates on policies and wholesale prices. An agent can tell you whether you will benefit from a term or whole life insurance policy.
Many people think they cannot afford life insurance, but that is not true because a policy can be customized to suit your need and fit into your budget. An agent can set you up on a monthly installment plan to make paying easy. You can get good life coverage for just a few dollars a month. Your family will really appreciate that you have made a wise decision for their future.