The Advantages of Term Life Insurance

There are two main types of life insurance that are available to everyone; there is whole life insurance and term life insurance. Many people are unaware even of the existence of term life insurance, which is a shame because term life insurance is usually much cheaper than the whole life insurance equivalent. If you are a shrewd investor then term life insurance could be just the option you are looking for. It can work out thousands of dollars cheaper every year giving you that extra money to invest yourself. Insurance companies are normally very conservative when investing your money; some people like this while others prefer a more risky but greater return investment opportunity.

Cost.

The obvious advantage of taking a term life insurance policy over a whole life insurance policy is the cost. Often a term life insurance policy will cost you hundreds of dollars a year but a similar whole life insurance policy can cost as much as thousands. In fact, there are some term life insurance policies that will cover you to the value of $100,000 over a ten year term that cost less than ten dollars a month. Obviously, similar factors are taking into consideration when applying for term life insurance as they are when applying for whole life insurance; factors such as health, family history, lifestyle and age.

Flexibility.

Term life insurance offers you a greater level of flexibility over it's whole life insurance counterpart. For less money you are able to take out short 10, 20 or 30 year plans and you are able to determine the exact level of cover that this offers. You may have a 4-year-old son and a partner who has opted to stay at home and look after him. Right now he is dependent on your earning money to feed, clothe and care for him but in twenty years he will have finished school, finished college and hopefully got himself a job. This means he is no longer your dependent and you may not need to make financial allowances for him in your life insurance. Alternatively, your mortgage may expire in ten years. You won't need to pay to cover your mortgage once it has been fully paid up.

Investment.

A term life insurance policy costs you hundreds, even thousands, of dollars a year less than a whole life insurance policy. This means that you can invest your money yourself instead of relying on the insurance company to do so. Insurers are typically very conservative when investing your money, so by taking a term life insurance policy you are able to be a little less strict over the type of investment you choose affording you a greater potential to make more money.

Copyright 2005 Stacey Zimmerman

Stacey Zimmerman is the owner and webmaster of Free Insurance Quotes. His site offers free online insurance quotes for homeowners, auto, life, health, car and long term care insurance. Be sure to visit his site http://www.freeinsurancequotes.us for the latest articles, news and tips on all types of insurance.

Whole Life Verses Term Life Insurance - Who Wins?

Comparing life insurance policies can be confusing, especially if you don't know the difference between the different types of life cover available. The two kinds you will see most often are term life and whole life, so let's compare whole life vs term life insurance.

When you buy term life, you are buying life assurance and nothing else. It is just a basic life assurance policy with no extras. Term life is not an investment. It has no cash value at all - unless you die of course. So if you pay your premiums for years you have nothing to show for it except that many companies will lock your rate for a certain number of years from when you buy the policy, or at least limit the amount of increase.

Whole life is a totally different story. When you buy whole life insurance, you are not just buying insurance. You are buying insurance that is bundled with an investment. In other words, a portion of your premium each month is invested and earns you a cash value on your insurance policy. If you have had a whole life policy for many years, you may be able to cash it out for a significant amount of money.

If you think whole life insurance is a better deal just because it has a cash value, you are sadly mistaken. In fact, it is term life insurance that is usually the better deal. The main reason is that when you buy whole life insurance, you are paying for both the insurance and the investment, but you really only get one or the other.

Take a little time to compare the prices of term life and whole life policies and you will see what I mean. The whole life insurance is significantly more expensive. Most people look at that and think that of course it is more expensive because you are getting more - cash value in addition to the life indemnity.

However, if you read the fine print you will find that if you cash out the whole life policy, you will no longer be able to collect on the insurance and if you die and someone collects the insurance, they cannot get the cash value. In other words, you are paying extra to get two things but you really only get one or the other.

If you buy a term life insurance policy instead, you can take the amount of money you are saving on the insurance and invest it into a mutual fund. That way, you really do have both an investment and an insurance policy. The insurance will cover you if you die, and chances are the mutual fund will be worth more than the cash value of the whole insurance policy if you don't. Plus, if you die while you are still insured, your beneficiary will get both the life assurance and the mutual fund.

When comparing a term life policy to a whole life policy, you need to look at the possible outcomes for each to decide which one is the better deal for your circumstances. I can almost guarantee you that the term insurance policy will come out on top every time.

Ever wondered where you'd find competitive term life insurance? Whether or not you qualify for senior term life insurance, you will find much of what you need in the free resources on our website. Visit us now.

Term Life Insurance Vs Whole Life Insurance

Term Life Insurance

Term life insurance is purchased for a certain amount of time, or a term. Many people look for a period of ten to thirty years. In other words, they are seeking to cover their lives for their working years, or the period when a home mortgage is being paid off and children depend upon them. They may feel that after the term of their policy they will have enough money saved to replace their need for life insurance.

When the term is over, the policy has ended. In most cases, that is the end of the relationship between the insurer and the insured. Sometimes an insurance company will offer a permanent or whole life insurance company at a much smaller face value to cover something we call final expenses. However, since the insured person is much older, and may have developed health issues, the premium for this type of whole insurance will be higher for a lower death benefit.

Whole Life Insurance

A whole life policy, as the name implies, will cover an insured person for their whole lives as long as the policy is in force. Most of the time all an insured person needs to do to keep the policy in force is to pay the premiums. Some whole life insurance policies can be "paid up" over a period of years. So with this type of policy, an individual may pay all the premiums over ten to twenty years, and then know that they will have life insurance coverage no matter how long they live.

Whole life insurance policies can build a cash value too, so instead of being "pure insurance", they can also be a savings vehicle. The value of the whole life policy can be cashed in or borrowed against, and can count as an asset for a person.

Term Vs. Whole Life Insurance

So which is better -- term life insurance or whole life insurance? Well, during a person's working years, and those years when many people may depend upon their income, the larger face value for less price on a term policy is attractive. However, that term may expire just when it will be harder for that person to obtain insurance!

I would suggest combining both types of policies to meet both needs. Choose a smaller face value whole life insurance policy to provide lifetime insurance coverage. Then select a term policy that is slightly smaller than the the estimated needs to provide the build of insurance coverage during working years.

How Much Life Insurance Do You Need, and How Much Will It Cost?

Find out more about the difference between Term Vs Whole Life Insurance. Also, Compare Life Insurance Plans and Prices [http://247quoteus.com/life-insurance.html] with our fast, safe, and free online life insurance quote form!

http://www.TermVSWhole.com

What's the Difference Between Whole and Term Life Insurance?

It's important to know the difference between whole verse life insurance before you start to shop.

Whole life (also called permanent) policies are insurance policies that accrue cash value over time and usually pay dividends. Buying a whole life policy is an investment. As the named insured, you have the ability to draw against the cash value. Whole policies are more flexible and more expensive than term policies.

Term life polices are less expensive and inflexible. Term policies are bought for a designated period of time. If the named insured dies before the policy expires, the benefits are paid. However, if the policy expires before the death of the insured, there are no return premiums. As the insured you have the option to renew the policy for another specified period of time, or let it expire.

The difference between whole life and term policies is similar to the difference in buying verses renting a house. A whole policy would be like buying a house. The purchase of a house is an investment. Usually the house appreciates in value. You can borrow against the growing equity in the house. When you decide to move, you sell the house and reap the financial rewards of the investment.

Renting, on the other hand, is like a term policy. You rent an apartment or house for a specific period of time (lease). You do not have the option to borrow against the equity. When the lease is up, you either renew the lease, or move. If you choose to move, you do not get a portion of the rent back.

Term policies do, however, allow you to upgrade to a permanent policy without the need for a physical exam (similar to renting a house with the option to buy). A change in your financial condition may allow you to afford a whole policy that was out of your financial reach a few years earlier.

View our Recommended Life Insurance Company, a simple site that has an easy to fill out application. It also has a lot of great info about Home Owners Insurance and Health Insurance

Term Life Insurance - Behind the Scenes

'All or nothing' has no place in financial planning.

Listening to the media people and taxi drivers can weaken the foundation for your financial future. Find a trusted adviser and learn from them. Check the qualifications of your sources of information. Well meaning friends and relatives are frequently a better source of myths than they are of facts.

Is term life insurance a better by than whole life, or is that a myth? Unfortunately TV personalities that present themselves as financial experts may not even have a license to give such advice. Recently I heard one (so called financial expert) say "...I HAAAATE (hate) whole life and universal life insurance..." To me such an emphasis on the 'hate' shows that this person doesn't have an open mind. They won't allow themselves to learn the truth because their mind is already made up. This financial guru's attitude is similar to any other prejudice.

Building Your Life Insurance Team

To build a team we must become aware of the strengths and weaknesses of each player. What would it serve a baseball team to position a catcher on the pitching mound? In order to be a winner you need to explore which type(s) insurance will serve your financial needs in the most efficient way. The best place to begin is to learn the proper position for various types of life insurance. Term Life versus Whole Life shouldn't be your concern. The question should be: How can term and whole life work together to save you the most money? Here is a simple way to determine which type to put in place in your plan.

If you won't need life insurance beyond twenty years - buy term. Usually the best prices for term are for ten and twenty year terms. There are other terms being sold but these have the most companies competing for your business. If you only need life insurance for five years it may be a better deal to buy ten year term and cancel it when it is no longer needed. Five year term is frequently more expensive to buy than ten year term. Most companies have discontinued their five year term plans for that reason.

Should you will need the insurance longer than twenty years consider whole life. Whole life will cost you less than term when you look beyond twenty years. There are several choices available after you own whole life for a number of years. You may be able to stop paying for it and still keep it in force in your old age. You can cancel it and get most of your money back, sometime you could even get more back than you paid in. There may be a life long need top pay final expenses or estate taxes.

You'll save the most money by combining these types insurance into one policy. Frequently you can buy a whole life policy for life long needs and add twenty year term for needs that will last about twenty years. You can also add a ten year term for needs that will be out of the picture in the next decade. For example you may only need $100,000 for life, but if you have a young family that will need much more insurance to provide income for 15 or 20 years. Perhaps you have a mortgage that will be partially paid down in ten years and the children will be older then also. You might set up the term riders as $500,000 ten years and $500,000 for twenty years. This way you get cheaper term life insurance as there will not be a policy fee on the term parts of your policy. The twenty year term will insulate you from the increase in premiums you would have experienced in year eleven if it had all been ten year term.

Check out these savings. Compare these actual rates. One man saved about 2/3 of his initial premium by buying term at $278 a year instead of spending $867 for whole life. However, when you consider the increasing cost of the term at each renewal he actually would pay $57,610 more for his term life. here is how it works:

A 40 year old man could buy 100,000 twenty five year term for $278 a year. At age 65 he discovers he still needs insurance so he buys a whole life plan at $3,400 a year for life By age 65 he paid $6,950 If he lives to age 85 he will pay another $68,000. His total cost is about $74,950. Insurance companies have got to love this guy!

That same 40 year old man could buy 100,000 whole life (paid up in 20 years) for $867 a year and he still has $100,000 to age 100 and beyond. Total cost for life $867 X 20 =$17,340. He saves $57,610! WOW!!

An experienced adviser can help. Make sure they have a license to sell life insurance. Agents don't just buy a license to sell life insurance they must study first. These are not snap courses. Many people have to rewrite the exams to qualify. Your licensed life insurance agent is a well educated professional. We'll continue to uncover other 'hidden weaknesses' behind the scenes as we journey through these articles.

Gordon Hughes, Enhanced Lifestyle Planner and Certified Financial Planner. Gordon has over 30 years experience in banking and financial services industry. He shares his awareness of behind the scenes practices that work to the advantage of banks, insurance companies and investment houses, but seldom benefit consumers.

Give a FREE ebook to a teenager or young adult. Help them to appreciate the value of money and avoid common financial mistakes. They'll appreciate it. Ebooks are at [http://www.SmartChoiceLife.net].

Check our NO CHARGE INSTANT LIFE INSURANCE QUOTING system at http://www.GordonHughes.ca. While there check out our Unique Anonymous Personal Financial Planning System, designed by Gordon to serve internet clients with direct personal access to Gordon and ongoing coaching.

Term Life Insurance: Is It Right For You?

If you've spent any time at all watching television recently, you've probably seen commercials advertising low-cost life insurance with guaranteed coverage that anyone can afford. And, if you're like many people, those commercials do get you thinking about the fact that you don't have life insurance yet, but you continue to procrastinate. (After all, you're going to live forever, right?) Or, maybe you think you can't afford the premiums or that you won't qualify for the rates advertised because of a medical condition, so you put off checking into your options.
The truth of the matter is that you DO need life insurance, and there really is affordable coverage out there to meet your needs. There are two main types of life insurance, whole life and term life. The less expensive of the two is term life insurance.
What is Whole Term Life Insurance?
When you buy term life insurance, you're purchasing a policy that will provide protection for a certain period of time. A 'death benefit' is paid only if the person insured dies during the term of the coverage. Most insurance companies have set coverage period lengths you can choose from. These coverage periods could be as little as one year at a time, but most often are offered in five or ten-year increments.
As the policyholder, you get to decide who will receive the benefit payment in the event of your death. You should know, though, that some states and insurance companies have requirements concerning who can or must be designated as the beneficiary. For example, certain states require that your spouse be the beneficiary if you're married, and some insurance companies will not allow you to name your pet as the beneficiary (too bad for Fluffy, you won't be setting her up with a golden doghouse and steaks for life!). However, within limits, you can leave the benefit to anyone you like or to your estate to be divided up according to your will.
The biggest downfall of term life insurance is that you have to die before your family gets anything out of it, because the benefit is only payable when the policyholder dies. The policy itself has no cash value, and you can't borrow against it like you can with whole life policies. Another negative aspect of term life insurance is that it becomes more expensive as you get older. And, speaking of age, you don't have the right to continue the policy regardless of your age the way you can with whole life.
You might be familiar with term life as a benefit that employers offer to their employees, but that doesn't mean you can't purchase an individual policy for yourself. On the contrary, many insurance companies offer individual term life coverage. The only trick is to determine what type of term life insurance is best for you.
What Kinds of Term Life Insurance are Available?
There are three different kinds of term life insurance. Each of them has unique aspects that make them the best choice for certain situations. The three types of term life are:
Depreciating Term Life: Depreciating term is used as a means to cover a mortgage loan in the event that someone dies prematurely. The amount of the benefit goes down, or depreciates, as the amount owed on the mortgage is paid off (a slow and painful process...). This is an excellent option if you're concerned about your spouse's ability to pay the mortgage payment after your death. The popularity of these plans has waned because level term life policies are generally cheaper.
Level Term Life: Level term policies are available in increments from five to twenty years. These policies are a good choice for anyone who needs relatively cheap coverage for a longer period of time than just a few years. The cost of the policy will be a bit more expensive than annual renewable policies for the first few years, but will then stay level for the term of the policy. Most insurance companies offer policies that once issued, premiums remain level regardless of the insured's health status.
Annual Renewable Life: Annual renewable life policies must be renewed every year, but they're a good, inexpensive option if you just need a few years worth of coverage to cover a short-term expense, such as college tuition for a child (which is only slightly less painful than paying the mortgage!).
Who Should Purchase Term Life Insurance?
Term life insurance is an excellent option for anyone who simply cannot afford the higher premiums required by whole life insurance.
One popular use of term life is to help young families to cover expenses if one of the parents passes away. Couples who are just starting out and have young children may be unable to afford expensive whole life policies, but it's not wise to leave one spouse without a means of covering financial burdens if the other should die--especially in today's two-income world. The benefit can help the spouse to pay the mortgage or care for the children on his or her own.
Another good reason to purchase term life is to cover your business debts. If you're the owner of a small business and have taken out a business loan, you may want to consider purchasing a term life policy to pay that loan in case you die.
What Options Should You Look For?
Just like the car sitting in your driveway, life insurance policies come with options (and just like the options in your car, these options may raise the price of the policy). Term life options that may be available include:
Conversion: This option allows you to convert the term life policy to a whole life policy at the end of the policy's term.
Automatic Renewal: Some companies offer an automatic renewal of the policy without requiring a medical examination.
Premium Waiver: Your insurance company may allow you to waive, or not pay, the premiums if you become disabled. The policy remains in effect just as if you were paying timely premiums.
Accidental Death Coverage: If your death is the result of an accident, the benefit paid increases, and may even double.
Regardless of your situation, there is a life insurance coverage out there for you. Take the time to request quotes and speak with insurance professionals who will be able to answer your questions. The time you spend finding a policy that meets your needs could save someone you love a lot of hassle and worry when you die.



Gary Stuart launched his career in insurance in the mid eighties. With only a telephone book and a pen and pad, he began building his agency one 'cold call' at a time. His specialties were group health, disability, whole life, term life insurance and more. At the start of the new millennium, Gary translated his years of experience into developing a web site that explores nearly every aspect of health and life insurance. Gary recognizes the importance of educating his customers before they make that all important insurance purchase. You can visit his site anytime at: http://www.accuterm.com

Term Life Insurance: The Differences Between Term and Whole Life Policies

Life Insurance quite generally is a policy whereby you pay a company a premium so that if you die while covered your descendents receive financial benefits. Within the larger Life Insurance window there exist two broad categories of policies, Term and Whole life (Whole Life is also known by the equivalent term Universal Life Insurance). Term Life is exactly what its name implies, valid only for a certain period of time, whereas Whole life lasts the duration of one's life.
Price Differences
Because Term Life has a structured beginning and end, typically from 1 to 30 years, it is normally quite a bit cheaper than Whole Life. That is because under Whole Life it is assured that the insurer will eventually pay out (as we all eventually die). Under Term Life, however, there is a very good chance that you will live through the period of the policy and thus the insurance company can simply take your premiums without ever having to pay out anything.
Benefits Differences
Another important distinction between Term and Whole Life is the fact that at the end of the Term Policy, the policyholder is left with nothing but his own health. On the other hand, with a Whole Life Policy the insurer often takes a portion of the premium and places it into a savings account for the policyholder. In case of emergency later in life, the Whole Life Policy Holder can access that money to meet some needs while still living. As you can imagine, the Insurance Company raises the price they charge for access to all of this.
Deciding Between the Two
So, how does one decide between Term and Whole Life Insurance? To best answer that question it is important to ask why you need the insurance in the first place. Is it because you have young children and a spouse who does not have the earning potential to get your children through college? Or is it because you work in a dangerous industry and will regularly face the prospect of death over the next few years? These are both excellent candidates for Term Life Insurance. In the first case, it is important that the provider ensure enough financial support for approximately 10 years and then the need drops off, while the second example may require a shorter 3 - 5 year Term Life Policy.
On the other hand, let's imagine that you have a mentally handicapped person you will support indefinitely, or a spouse that has never worked at all. These may be better candidates for Whole Life as the financial need they feel responsible for extends not only to some definite period in the future, but as long as the other person is alive. Under these circumstances, paying the premium for Whole Life might be worthwhile.
Term and Whole Life Insurance fill an important void in many lives by providing some assurance that in case of an accident, loved ones will not be left stranded. It is important to remember, however, that the policies are not panaceas. The savings rate on Whole Life Policies is usually dismal compared to open market rates, and with Term, you are making payments on a product you may never use. Ultimately, the decision to purchase either of these products should involve weighing your personal risk and health, your current and expected financial situation, and alternative uses for funds you have earmarked for a policy.