Why whole life insurance may not be for you.

Whole Life or Term Insurance?


Great question!

Whole life insurance is a terrific policy to guarantee your insurance rate while also building a cash value account. The key question is how much coverage do you need today vs. how much premium you have available in your budget?


You will certainly be able to buy a much higher death benefit with a term life insurance policy compared to a whole life insurance policy with the same amount of premium dollars.


For example, if you have two young children at home and you have very limited funds for life insurance, it would make more sense for you to purchase a term life insurance policy with a greater death benefit than a whole life insurance policy.  Whole life insurance is more expensive than term life insurance as whole life insurance has a cash accumulation account. Most term life insurance policies do not provide cash accumulation.


It is critical to protect your young children and your spouse with a larger term life insurance policy than it is to focus on building a cash account for 30 years down the road with a whole life insurance policy.


Another terrific example is if you purchase a home with a 20 year mortgage. Many people will buy a very affordable 20 year term life insurance policy .  The rate will not go up and the level death benefit protection will last for 20 years, guaranteed. This is a common and smart strategy to pay off your mortgage in the event of a loss of the mortgage holder or spouse.


On the other hand, if you have a larger budget for life insurance, it makes more sense to purchase a whole life insurance policy (or Indexed Universal Life). The benefits are your life insurance coverage will last forever at your current rate and you will build a cash account for future needs.


Again, we welcome any questions you may have about which type of life insurance policy you need for your personal situation. No two people or families life insurance needs are alike.


Yes, Jack, I have questions. CONTACT JACK.


Call Jack today: 727.735.3200