Term Insurance vs. Whole Life Insurance

Term vs. Whole Life Insurance

Low cost term life insurance vs. higher cost whole life insurance, which product works best? Term is the best option, but that does not mean you should never look at whole life insurance. Both products serve the same purpose and understanding the differences is important.

Term Life Insurance

Description, low cost term life insurance is just that. Term insurance is for a certain period. The most commonly known term policies are 5, 10, 15, 20, 25 and 30 year terms. Some life insurance agents say this is renting insurance. Remember, renting does serve a purpose. This period certain makes up the low cost term life insurance. Term insurance is pure life insurance.

Most people out live their term life insurance. In fact, less than 10% of low cost term life insurance is claimed. The reason is simple, the term ends before filing a claim. Low cost term life insurance is to protect the family from financial hardship if something tragic happened. You should be planning an exit from life insurance, just as your kids are planning a career for themselves. The exit strategy is the reason low cost term life insurance works well during you investing in retirement and becoming debt free.

Whole Life Insurance

Whole life insurance has two parts, life insurance and savings. The time period for whole life is just that, your whole life. Health and age determine the premium. Because the rate does not change over your life span, if done correctly, the insurance company must account for the older years and the payout.

Whole life insurance covers you young and old, more likely to pay out and has savings built in. Now you know why it cost more than low cost term life insurance. The saving options whole life insurance has cannot replace investing in mutual funds. Some agents talk about loans and tax-free money. Managing life takes enough time; do not add more to the mix. More whole life insurance policies go south trying to get money out.

The best whole life insurance policy covers your final expenses.

Cost vs. Savings

Whole life insurance vs. low cost term life insurance is about eight times higher per year. Say a term policy cost you $600.00 per year. The same coverage using a whole life policy would be about $4800.00 per year. The first seven to ten years the whole life policy will not provide any savings. If you put $4600.00 per year in a Mutual Fund, the saving starts immediately.

The emergency fund is always ready using Mutual Funds. You have surrender charges in the first seven to ten years using a whole life policy. Purchase a low cost term life insurance policy and invest the savings for retirement and emergency funds.

Family Planning

Every family should have a plan. The best way to help with this plan is ask, “If I died today what would happen to _____________”. Make a list to fill in the blanks. You will come up with how much life insurance you want and the term you need to have insurance. Remember, you do not have to get one big life policy. You can have a 10-year term and a 30-year term. It has to work for you and low cost term life insurance works.

The best life insurance policy is the one in force when someone passes.

Could You Benefit from Bundling Your Insurance?

Bundling Your Insurance

insurance companyTrying to find the right insurance policy can be overwhelming, to say the least. Insurance is something everyone who owns a home or a car should have. But unfortunately, it’s not always easy to find an affordable plan that offers good coverage. This is why many people decide to bundle their insurance plans. Bundling, or buying more than one insurance policy through the same insurance company, can be a great option for a lot of people. But how could you benefit from bundling your insurance?

It saves you money: The most obvious benefit of bundling insurance is saving money. When you bundle insurance, like putting your car insurance and your homeowners insurance together, you can see a decrease in rates for both plans. When you combine policies through the same insurance agency, you’re setting yourself up for some great savings opportunities. Because you’re choosing multiple insurance policies through the same provider, the insurance company is going to reward you for your business. So if you’re looking for an easy way to save on insurance, looking into your bundling options is a great place to start.

It’s more convenient: In 2016 alone, 5.3% of homeowners filed an insurance claim, according to ISO data. Because insurance is something that you’re going to be dealing with a lot — whether it’s making payments or choosing plans — you’re going to want the most convenient option possible. And when you bundle your policies, one of the first things you’re going to notice is how convenient it is to work with just one insurance company. No more trying to remember different payment dates, piles of paperwork, or contact information for all of your different insurance companies. Overall, bundling insurance is a great way to make dealing with insurance policies easier and more convenient.

It avoids coverage gaps: When you have all of your insurance policies through one provider, you’ll have a higher chance of avoiding coverage gaps. When you have to deal with multiple providers, or switch providers due to policy changes, you may find yourself facing a lack of coverage for a period of time. This can be detrimental, especially if something happens during this time. So to avoid having to sacrifice coverage and ensure your personal property is fully protected, working with one provider and bundling your policies could provide to be beneficial.

When you find an insurance company that offers great policies and friendly customer service, consider bundling your plans with them. Bundling can offer convenience, security, and even potential savings.