When deciding how to plan your future finances, most financial counselors will advise that you buy at least some amount of life insurance-a sufficient amount to cover your family, particularly if your kids are younger and rely on your income for the immediate future.

Perhaps the thing that is most confusing about which life insurance plan to choose is whether to buy term or whole life insurance. If you talk to an insurance agent, they will probably recommend whole life insurance, but for most people I would recommend choosing to buy term life insurance.

Here are a couple reasons why you should not buy whole life insurance:

1. It’s far more expensive than buying term life insurance

If you’ve ever compared life insurance rates, you are probably aware that there is a big difference in cost in monthly premium between whole life insurance and term life insurance.

In a normal scenario, if you have a term life policy that covers you for $250,000, you may be paying a premium of about $20 a month. That same $250,000 in coverage in a whole life insurance policy might run you $300 a month or maybe more.

Of course, this is only part of the story. Term insurance does not accumulate any cash value, life a whole life policy does, and it only pays you upon the death of the policy holder. On the other hand, the whole life policy not only pays a death benefit, but it also gains cash value and can be borrowed on or cashed out at a later time. This leads me to the other reason why it’s not usually a good idea to buy whole life insurance:

2. Whole life insurance is not a good investment vehicle

If the $300 per month you were putting into a whole life policy were going to yield a good return on investment, it would almost be worthwhile. But the reality is that much of what you are putting in is eaten up in fees and it is often very difficult to determine what kind of return on investment it will bring.

Another bad thing about having a whole life insurance policy is that when it comes time that you need the money and want to cash it out, you no longer have the coverage on your family in case of your death-which was the main reason you bought the policy in the first place. This makes whole life insurance a really bad deal.

Most financial experts who are not insurance agents believe that the best financial plan is to buy term life insurance and invest the difference in premium. To put it another way, use life insurance the way it was designed-to protect your family financially, then take the money you would have spent on a whole life insurance policy and invest it in some other vehicle like an IRA.

If you choose this path, you will be able to fully cover your family in case of your death at the best possible price, and you will also be given the freedom to take the money you save and choose the best investment vehicle to suit the needs of you and your family.

Compare the lowest rates on term life insurance quotes today, and take the first step toward securing your family’s financial future at www.lifeinsurancequotetoday

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