Term Insurance or Whole life Universal Insurance

Here are some insurance related questions answered

• Difference between whole and term life insurance

• Who need life insurance?

• Whether you need to change your insurance when you get in to family responsibilities

What is the insurance

when we talk about insurance some peoples eyes glace over? Many people perceived to be a high pressured kind of sales technique these are the confusions all over here is the situation when you need insurance.

First, when you got dependence you are married and you have a spouse and to take care of your family and if you have kids of under age and they need to be brought up in such stages and if you owns a small business which may easily liquidated, and if you are a real estate tycoon and the market can cause a big burden on you, in these cases you need insurance.

As every one knows insurance is not an investment. And in the earning ages you can think of investment planes and when it comes to a 30 – 35 years you can think of insurance then comes which type insurance? Term life insurance or whole life insurance

Whole life insurance is permanent death benefit. You have to pay big premium that have high cost carried in to in order to cover the marketing and to cover the cost of who markets these policies. In whole life insurance you can’t get a chance to take advantage of your money your dependents get the money.

Where as in Tern Insurance it’s for specifiedperiod of time say 20 years the premiums are of much lower cost. It’s all up to certain circumstances which are best suited for you.

Whole or Universal life insurance

• Known as permanent, whole life, variable life, universal etc
• Combines life insurance with savings component that builds cash value
• Premiums are quite high
• Coverage for as long as you pay the premiums

Term Insurance

• Level term, annual renewable term etc.
• Provides a death benefit only
• Premiums are generally quite low
• Policy term can be up to 35 years

Four major disadvantages of whole life insurance.

• No interest is earned for the premium of first two years

• When you start earning interest on premium it is very small amount 2 to 3 %

• When you borrow money from insurance company you have to pay interest for your money to insurance company.

• Lose the cash when you die, but your dependent can take advantage
  

• Agents get high commissions on premium ie a lot of your premium amount goes to the insurance agents fat commissions

You can buy more coverage by less money these days people are getting educated and they aware of the disadvantages of whole life, universal, cash value life insurances

And this difference in term insurance and whole life insurance are reported in Government and independent rating firms such as NASD, BBB, AM. Best etc..

Now its your tern to choose the best as per your needs.