Each period of your life requires different life insurance strategies; and knowing these strategies will save you money, while still providing you with peace of mind.
Term vs. Whole Life Insurance
The primary differentiation between term life insurance and whole life insurance involves an investment component. Term life insurance is life coverage alone, while a whole life insurance policy merges a term policy with some type of investments like bonds or stocks. A whole life policy then builds a monetary worth that you can borrow against.
When should you consider whole life insurance?
- You want life insurance to cover expenses in case of death.
- You don’t have the ability to save money: whole life is an investment vehicle.
- You would like to gain cash value and borrow money from your policy.
When should you consider term life insurance?
- You want life insurance to cover expenses in case of death.
- You have the ability to save money and invest on your own.
- Your personal finances are in order.
- You want a low monthly payment.
When do you not need life insurance?
- No one depends on your earning capacity.
- Your children are out of the house and you have sufficient money for your spouse.
- If you have considerable assets (2 million +), or businesses, you should look into estae planning.
What should you do?
Whole life insurance makes insurance companies money, but can help you save if you know you won’t do it any other way. On the other hand, term life insurance is cheaper and does provide for your dependents in the case of your death.
When it comes to life insurance, you must understand your ability to save money; as well as when your life requires life insurance, which is anytime you have dependents that need your earnings or assets.
