| Term Life Insurance-Your Best Choice to Save Money |
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| Written by Mike Carselle |
| Wednesday, 12 May 2010 21:43 |
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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.
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. Term life insurance is much more basic and far less expensive. A term life policy will not accumulate any cash value, it will only pay your loved ones a death benefit if something happens to you, and it is only valid for a set term that you determine-like 10 or 20 years. For most people, term life insurance is the best kind to buy. The reason is that you can typically gain far more coverage for your loved ones at a far lower cost than with a whole life policy. Since the main purpose of life insurance is to secure your family in case something happens to you, this is normally the best kind of policy to buy. While it is true that whole life will give you an asset that you can later cash in or borrow against, much of the money invested there is eaten up by fees and it is very hard to determine what your actual return on investment will be. In most cases, you will be much better off investing directly into the stock market or some other investment vehicle. So, the wisest move for most of us is to invest in term life insurance, where you'll gain far more value on your purchase. For example, a healthy 30 or 40 something person can typically get a term policy with $500,000 worth of coverage for around $20 or $30 a month. That same amount of coverage in a whole policy will run you several hundreds per month. If you take the difference in cost between the two policies and invest it directly into a different financial vehicle, you will end up a lot better off down the road. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. 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 |