A lot of people get confused by millions of types of insurance plans out there. The truth is, it’s very simple to choose: Refuse all kinds of life insurance with the cash value feature, and simply choose the basic, no non-sense term life insurance.
Why? There are just too many credible experts that comment on the cons of cash value whole life insurance, while only institutions that affiliate with the industry and insurance agents praise the pros. In other words, there is a lot of blowing one’s own horns and whistle blowing at the same time. The conclusion is that term insurance makes more sense for the majority of people. I will elaborate.
Life insurance is about insuring untimely death. Young families cannot afford to have the bread winners die when there are many financial needs and liabilities, so they need to insure their incomes. It is not a get rich quick scheme. The insurance company will recoup the losses from those who die early from premiums of those who live long. If the insurance company expects a policy group to live longer, the cost will be lower and vice versa. Women pay lower premiums for life insurance because their life expectancy is longer than men in the same age group.
If you buy whole life insurance, the insurance companies expect you to die and to pay you the death benefit at some point, so they take that into account and increase the price of your insurance accordingly. The increase of price is a lot. For term insurance, the maximum period of coverage is about 30 years, so you will be much less likely to die, compared with whole life insurance.
Another huge factor that makes life insurance with cash value so expensive is the cash value feature. It gives insurance agents more commission.
In another article, I have explained all the hidden traps and sugar coating of cash value life insurance. The insurance agent has a vested interest on the commission, and term life insurance guarantees that he will get very little of it. New versions of cash value life insurances such as Variable life insurance will give them lucrative commission fees, and is more of a rip off for the customers. Often times, they can’t afford the hidden fee and increasing expenses of such policies. You will find out more if you read that article I mentioned through the link I provided in the below.
Looking to find the best deal on life insurance? then learn about how to insure yourself by learning how to buy term and invest the difference.
categories: whole life insurance,term life insurance,cash value life insurance,buy term life insurance
Tags: buy term life insurance, cash value life insurance, Insurance, Term Life Insurance, whole life insurance
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