With all the talk about the need for life insurance to protect your loved ones, the question always comes up-what is the best kind of life insurance to buy? Life insurance is broken into two basic categories-term life insurance and whole life insurance.
Whole life insurance is the more expensive option and gives you more features. With whole life, the policy not only pays a death benefit, but it also builds cash value while you pay into the policy and beyond. This can either be through a savings plan or investments in stocks, bonds or mutual funds.
A term life policy is far less costly and a much simpler policy. A term insurance policy wont build cash value, instead it will just provide your family with a cash payment upon your death. Also, it typically only runs for a pre-determined term, like 15 or 20 years.
For most of us, it is best to buy term life insurance. The biggest reason is the big savings you get vs whole life insurance. And, since the real purpose for buying life insurance is to cover your loved ones in case you die, it makes the most sense to purchase term life insurance.
Of course, the argument for whole life insurance is that you will gain an asset with cash value that you can later take out a loan against or cash out, but the drawback here is that a great deal of the money you invest in this policy will go toward policy maintenance fees and that will make it very hard to figure out what kind of a return you can expect from your investment. This is why the majority of people will be end up better off financially just investing directly into stocks, mutual funds, IRAs or savings.
So, my best advice for the vast majority of persons is to get term insurance, where you receive the best value for your investment dollar. Here’s an example. If you are a healthy 30 to 45 year old, you can probably qualify for $500,000 in term life coverage for only about $20 or $25 a month. To get that same dollar amount of coverage with whole life, you will have to shell out several hundred dollars every month. If you just buy term and invest the difference in cost into another financial vehicle, you’ll be far better off in the years to come.
Compare the lowest rates on term life insurance quotes and get started today on the path toward securing your family’s future at www.lifeinsurancequotetoday
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