You get the largest amount of insurance coverage for the least cost when you buy whole life insurance?

Question

true or false?

Answer 1

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Answer 2

absolutley NOT......term is much cheaper than whole life.

Answer 3

That is not a true statement.  It would be true, however, if you substituted TERM LIFE for WHOLE LIFE in that statement.

There are advantages and disadvantages in each of these two major categories of life insurance.  Without going into them I just want to explain their major points.

TERM LIFE  -  Much cheaper than whole life, but is purchased for a stipulated "term".  That term can be one year, ten or twenty years, etc.  At the end of the term, the premium is going to increase or the amount of coverage (death benefit) is going to decrease.  Additionally, you may have to give evidence of insurability (health and physical condition).

WHOLE LIFE  -  While more expensive than term, in most cases the premium remains the same for the rest of your life.

Whole life insurance, unlike term, builds up cash or loan values.

Answer 4

False.  Whole life is the smallest amount of coverage for the highest price.

Term life is the best bang for your buck.

Answer 5

What might appear to be a fixed premium of a whole life policy might be an illusion.  I had a whole life policy since I was young and foolish.  But I started looking at the tables, and while the premium remained the same, the amount paying for insurance increased over time, decreasing the amount going towards building cash value as time marched on.

Since I was well on my way to establishing retirement savings and did not really need the insurance, I surrendered (cancelled) the policy to start my Roth IRA.  I figured paying into that would be more useful than continuing to pay the rising price of insurance I no longer needed.

Whole life has higher premiums than term because it includes limited savings.  Term is less because it is just the cost of insurance, which allows you many more options for investing the difference anywhere else.