I am between the age of 30 - 35. Which life insurance is better for me to get, Term or Cash Value?

Question

I am between the age of 30 - 35. Which life insurance is better for me to get, Term or Cash Value?

Answer 1

You can buy either depending on the reasons why you are taking the insurance.

If you want a low cost life insurance which doesn't have any cash value whereby you are paying premiums and cannot recover any of that cost in future then Term policy is recommended.

Term policy is taken in instances when you want to take insurance to cover a debt like mortgage so that in case of death then the insurance would pay off whatever outstanding loan.

But if you want to recover part of what you are paying as premiums as cash value then whole life and other life insurances would be recommended.

The advantages of whole life insurance is that your fixed premium payment helps build up a cash value which can be withdrawn by the policyholder.

But these different types of life insurance are more expensive compared to term life insurance.

Answer 2

As the first reply asked.. What's the goal?

If you have a family to support, or a mortgage and other short-term debts you want taken care of in the event of your passing. Or do you want just enough to cover funeral expenses, etc.

Everyone seems to think it's a question of either permanent insurance, or term.. when really the best answer is to use the advantages of both types of policies. When someone "pushes" only one type of policy, they are doing a disservice to their clients and showing their own shortcomings in the insurance/financial services field.

Richie.. you better take another look at the differences between term and the many different whole life/endowment policies.

Answer 3

Nivee gave a good description of Term insurance.

Most experts agree that Term is the better option for most people.  

Advantages:

-Much cheaper

-You pay for insurance only when you need it (ie when you're 60 you should have large enough retirement assets so that your dependents could survive just fine off those rather than off your insurance... so you probably don't need insurance after that point).

Disadvantage:

-No cash value

The experts (and I) suggest that you get term insurance and keep separate investment accounts separate from insurance.  Let insurance do what it does best (pay a death benefit if you die) and let investments do what they do best (gain value over the long term).  Getting a cash value insurance product combines the 2 and they tend to be very inefficient.

Best of luck out there with your insurance decision!

Answer 4

Term life insurance is often touted for its "pure insurance protection," which includes none of the cash value features inherent in whole life policies. Term life insurance covers you for a specific period of time - as short as one year, or as many as 10, 20, or even 30 years. You can also buy term insurance that covers you until you reach a certain age, usually 65 or 70. Term insurance policies expire at a set time.

Answer 5

We have no idea.  What's the GOAL of the insurance?

Answer 6

There is only Term insurance.  Cash value is a contract with Term insurance and a lower yield savings plan (compared to one separate).

If you are looking for cash value, get term and make your own savings plan.  Less fees and higher rates of return are typical.

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Edit:

Looks like I got rated done for stating fact.  Must have been by cash value agents living on higher commissions.

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BrianW

I have.  When you get to the bottom of it, it is a contract with a Term insurance product combined with a savings plan.  That is all.  The best feature they have is a higher commission for the agents.

The agents whom offer policies without actually reading and understanding the contracts they are offering are the ones doing a disservice.  I push term because I believe in pure insurance and pure investments.  It costs less and the end results are better.  No smoke and no mirrors.