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Which is better term life insurance or whole life insurance

Answer Question
 
mamaofficer

Asked by mamaofficer at 7:39 PM on Mar. 4, 2010 in Money & Work

Level 31 (50,120 Credits)
Answers (5)
  • I have term, for years down the line I may want to change my policy. Right now I have SMALL CHILDREN and a mortgage, so DH and I have a LOT of insurance on each of us. I may not need as much 30 years from now.

    KairisMama

    Answer by KairisMama at 7:42 PM on Mar. 4, 2010

  • Term life insurance is good when you are young. The problem with it is that after a certain age you either can't get it or the premiums are sky high. The good news is when your family is young it lets you have a large amount of coverage at a reasonable price. Whole life stays with you, your premiums are more expensive but they can't drop you when you are older or if you should develop a health issue. You can also borrow against most whole life policies.
    CorrinaWithrow

    Answer by CorrinaWithrow at 7:55 PM on Mar. 4, 2010

  • The reason we get life insurance is to cover us in case we die before our assets have built up enough to take care of the people left behind. So say you get 20 year term life and during that time you pay off the home, get the gets in college, save for retirement, etc. And then your term life expires and you die... well you had assets so you're self insured.

    On the other hand, whole life policies charge you more for the same coverage so part of your monthly payments goes towards premiums and part of it goes towards a savings plan on the side that averages a 6 to 7% return. Where as the stock market has averaged an 11.4% return. Why only 6 or 7% then, because they charge you tons of fees along the way.

    If it is a whole life policy and you die, your family is left with the face value of the policy and not the savings you built up. If you get a term policy (cheaper) and invest the difference and you die, your family gets both.
    Anonymous

    Answer by Anonymous at 11:31 PM on Mar. 4, 2010

  • Check out DaveRamsey.com or the Dave Ramsey group on Cafemom for more information.
    Anonymous

    Answer by Anonymous at 11:32 PM on Mar. 4, 2010

  • Term. Once your children are on their own, and your mortgage is paid off, you no longer need life insurance.
    rkoloms

    Answer by rkoloms at 9:02 AM on Mar. 5, 2010

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