Term life and whole life insurance

Term life and whole life insurance; Which type of policy is best for you, term or lifetime? The answer depends on a number of factors, including-

Term life and whole life insurance

PicturTerm life and whole life insurance: 

Your needs

If you only need coverage until your children graduate from college, for example, you may be better off with a term life policy.

Cash-value

 Cash-value insurance is more suited to long-term needs, such as planning an estate tax and providing lifelong security for your spouse. Some term policies cannot be renewed after the age of 70 or 80 and renewal can become costly as you reach that age.

Price 

If term life insurance is more suited to your budget and you want lifetime coverage, consider a term life policy that can be converted into a full life policy. You can then convert the policy whenever you have the cash flow or need. You can also buy a combination of term life and whole life insurance and gradually move to full life insurance over time.

Target your savings and investments

Whole life insurance can be a good long-term investment vehicle, especially since cash value is likely to be tax-delayed. If you no longer need insurance but want some extra cash, you can surrender the policy and collect the deposited cash value. Be sure to discuss the tax results with your tax advisor first.

As an alternative, you can purchase term life insurance and invest what you save on your premiums. You expect that return

Compare what you can do and if you plan to choose a taxable investment, be sure to consider the tax.

So, should I buy term life or whole life insurance? 

Both term life and full life insurance have benefits with instant family protection. Careful consideration is given to deciding what kind of policy and features are right for you and most of the time, an understandable aspect of your financial planning.

To discuss your life insurance needs and financial needs, contact your financial professional.