Over the last 30 years, consumers have been advised by many in the financial and insurance arenas to buy low-cost Term Life insurance and invest the difference saved by not buying Whole Life insurance. This philosophy tries to compare the cost of Term Life versus Whole Life, where the Whole Life permanent plans are much more expensive up front compared to Term Life.
If you take the difference in premium of a Term Life policy and invest it wisely, you could in fact have more in savings than what the Whole Life plan would have accumulated in cash value over 30 years. That has proven to be true to an extent, however it does not take into account the fact that people are living longer and eventually Term Life insurance either expires or becomes cost prohibitive. If people have the Whole Life plan, it could last well into their senior citizen years, having the life insurance already in place at an affordable cost when it is really needed. Insurance carriers have come up with “permanent-type” plans in the last five years that can guarantee the death benefit and premiums for the life of the insured.
If you are like many people who are confused about Term Life and Whole Life insurances, give me a call at RJINS. I’ve been doing this for a long time and I would be happy to explain the differences and discuss what might be the best options for you and your family.