Term Life Insurance Articles
Why Whole Life Insurance Policies Are Not For Everyone
2010-03-24
While there are many positive points to all the different types of life insurance policies, every policy is not meant for every person. Whole life insurance is right in some situations, but it is very limited in most cases and cannot offer sufficient coverage for many people. Term life insurance is the most popular type of life insurance today because it is very flexible and can offer large amounts of coverage for a reasonable cost. Whole life insurance policies are right for some, but lower term life insurance can be found in almost all cases.
The primary reason is that life insurance is normally purchased is as a safeguard. People who want to be sure that they have a way to take care of their family should disaster strike, want to purchase insurance that will provide for that. In most cases, when a person asks for a term life insurance quote, or for a whole life insurance quote, they are asked to give the agent a general idea of how much money they would need for the policy to pay out to the beneficiaries in the event of the death of the policy holder.
Generally, policy holders will need to plan for a policy that can provide their beneficiaries with a sufficient amount of money to allow them to maintain their current lifestyle, should they pass away. In many cases, this will be a significant amount of money since it must take factors such as paying off mortgages, providing for college educations for children, and paying for family vehicles, into account. A whole life policy simply cannot provide a significant lump sum of money in most cases. Whole life policies rarely amount to more than $25,000 to $50,000, and in many cases this would not even be sufficient to take care of the needs of many families for one year.
A term life insurance policy is a better choice for people who need for their family to be guaranteed a significant sum of money upon their passing. A term life policy offers the advantage of guaranteeing a large amount of coverage for very low rates. Term policies are often as large as $100,000 to $500,000, and can be obtained for a fraction of the cost of whole life policies. While this type of policy does not build a cash value option, like the whole life policies do, this is not a detraction to financially savvy consumers, since the policies are always inferior to a simple savings accounts that can guarantee a higher rate of return on savings. Term policies are an excellent choice for any person who wants to have the peace of mind that having their family covered can provide.
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While there are many positive points to all the different types of life insurance policies, every policy is not meant for every person. Whole life insurance is right in some situations, but it is very limited in most cases and cannot offer sufficient coverage for many people. Term life insurance is the most popular type of life insurance today because it is very flexible and can offer large amounts of coverage for a reasonable cost. Whole life insurance policies are right for some, but lower term life insurance can be found in almost all cases.
The primary reason is that life insurance is normally purchased is as a safeguard. People who want to be sure that they have a way to take care of their family should disaster strike, want to purchase insurance that will provide for that. In most cases, when a person asks for a term life insurance quote, or for a whole life insurance quote, they are asked to give the agent a general idea of how much money they would need for the policy to pay out to the beneficiaries in the event of the death of the policy holder.
Generally, policy holders will need to plan for a policy that can provide their beneficiaries with a sufficient amount of money to allow them to maintain their current lifestyle, should they pass away. In many cases, this will be a significant amount of money since it must take factors such as paying off mortgages, providing for college educations for children, and paying for family vehicles, into account. A whole life policy simply cannot provide a significant lump sum of money in most cases. Whole life policies rarely amount to more than $25,000 to $50,000, and in many cases this would not even be sufficient to take care of the needs of many families for one year.
A term life insurance policy is a better choice for people who need for their family to be guaranteed a significant sum of money upon their passing. A term life policy offers the advantage of guaranteeing a large amount of coverage for very low rates. Term policies are often as large as $100,000 to $500,000, and can be obtained for a fraction of the cost of whole life policies. While this type of policy does not build a cash value option, like the whole life policies do, this is not a detraction to financially savvy consumers, since the policies are always inferior to a simple savings accounts that can guarantee a higher rate of return on savings. Term policies are an excellent choice for any person who wants to have the peace of mind that having their family covered can provide.
