Life Insurances Reviews & Info

Which is better whole life or term? That debate has been going on for a long time.

I was probably exposed to this debate during my first week as a health and life insurance agent back in 1985. Not much has changed. The pros and cons are the same.

Unfortunately many of the people debating this issue have a dog in the fight. Insurance agents and insurers make bigger commissions on whole life insurance coverage and therefore will often point out the “cons” associated with term life insurance policies. Certain financial advisers will suggest that you invest in cheaper term insurance policies and invest the difference in hopes that you will invest with their businesses.

Who is right? Term insurance is cheaper today, but gets more expensive as we get older. Whole life insurance is more expensive today, but doesn’t increase in price as we age.

Neither type of policy is inherently better when it comes to its primary reason for existence. Your widow or widower won’t care much about the type of policy that you bought. They are only going to care about the amount of the death benefit check.

Many suggest that we “buy term and invest the difference.” This usually results in a much higher return in the long run.

However, often those who suggest this to their clients show the returns one might expect from investing in instruments that have much more risk than a whole life policy. If one buys term and invests the difference in CDs or a savings account, one can expect much less of a difference.

Insurers want you to buy their more expensive products because their companies make more money on them. However, sometimes the more expensive product is a better product.

In order to determine whether the pros of whole life insurance outweigh the cons, you will need to do a little math. Do your own math and don’t let someone else’s slanted numbers push you in the wrong direction or towards the wrong company.