Term Insurance is the most practical and affordable type of Life Insurance. Whole Life policies are a very poor value for your insurance dollar. Neither do Whole Life policies perform as the agent will try to tell you. The agent promises that your policy will have “cash value” and that you can borrow against that “value”. What the agent does not mention is the fact that you are actually borrowing your own money (you put it into the policy) and to add insult to injury, you are paying interest on it as well. Should you die before paying the money back into the policy, your beneficiary will recieve the face value minus the amount of the loan you took out.
The smooth talking agent will also try to tell you that after a certain time frame your policy will be “paid up” and you will no longer have to make payments on it. Nothing is free and your premiums must be met somehow for the entire time you own the policy. As you age, it costs more and more to insure you. The money for those high premiums is going to come from somewhere and it won’t be from the insurance company’s generous heart. The money will come straight out of the acrued “cash value” of your policy. Every month until you die or until the cash value runs out. Once the cash value has been used up to pay those premiums the agent promised you would no longer have to pay, the policy is exhausted. You will either be forced to make the high payments out of your pocket or the policy will lapse with no value, meaning that your beneficiaries receive nothing.
Believe it or not, all of this information is actually printed right in that insurance policy. But, who bothers to read their life insurance policy, right? These are just a few of the dirty little secrets that your whole life insurance agent and company does not want you to know. I suggest that you get your policy out and read it for yourself. Once you’ve learned the truth, and if you need to provide the right kind of insurance to protect your loved ones in the event of your death, contact an agent who sells strictly term insurance.