Izzie
Whole Life vs. Term Life
3746
13
2006-07-27 23:42:00
Since LZMM is gone for the day, may be I can contribute to her topic.
For those who don't already know, a term life insurance policy provides a stated benefits upon the holder's death, provided that the death occurs within a certain specified time period. However, the policy does not provide any returns beyond the stated benefit, unlike an insurance policy which allows investors to share in returns from the insurance company's investment portfolio. [per Investorwords]
Advantages
- Term Life covers a protection need that has a specific time duration, such as a mortgage. If your insurance need is projected for only a certain number of years or you cannot afford a more permanent type of insurance, Term Life may be an appropriate choice.
- You can choose protection for from one to 20 years or longer.
- Term may be right in instances where there may not be a large need for insurance after a specific time period; for example, after a substantial debt is paid off.
- Because you're paying for only the cost of insurance and building no cash value, Term can save you money or allow you to purchase a larger death benefit than would be manageable, otherwise. However, the Term premiums may eventually exceed premiums on other forms of insurance.
Disadvantages
- Term Life doesn't provide a cash value.
- Term Life doesn't provide permanent life insurance protection and can become prohibitively costly as you get older.
Term life insurance is good for short term needs. Two good examples of this are to cover your children's college education and to cover your mortgage. Parents could buy a policy that expires after their children graduate from college to ensure that the full education is paid for (in case anything happened to the parents). Or, the main breadwinner in a house could buy a term policy that matches the length of his or her home's mortgage.
LZMM can share with us any additional understanding on the term and whole life insurance.
Don't mean to cut you off. I just have too much free time at the moment...
Ｔｅｒｍ即便不保终生，但从现在开始保３０年，为买房，买车，父母的赡养，小孩子的教育，配偶的生活提供保障，应该差不多够用了。３０年后，大家应该都有了点家底，退休金，养老金等等。或者还可以再买３０ ｔｅｒｍ ｌｉｆｅ。我在第一个贴例举了个例子：如果你现在３０岁，保３０年＄２００，０００ 的 ｔｅｒｍ， 每月保险金是＄２０。 如果你现在６０岁，同样保３０年＄２００，０００的ｔｅｒｍ， 每月保险金是＄５０。
summerhole MM说得很对。Buy the term life insurance when we are healthy. When we get into our 50s and beyond, it will become more difficult to find affordable term life insurance.
Term life insurance is really not an investment. It helps mitigate the risk of negative fianncial consequences if something unfortunate were to happen to us. So we ought to buy enough life insurance to meet your needs and also, match the term to our needs. Make sure that our dependents are covered until they can provide for themselves, or that your spouse is covered until retirement income becomes available.
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