Is whole life insurance the right choice for you?

Just what exactly is whole life insurance?

In previous columns I have demonstrated that term insurance
could most certainly be your best investment if you were to die
during the term for which you contracted.
In previous columns I have demonstrated that term insurance could most certainly be your best investment if you were to die during the term for which you contracted.

Whole life also could well be your best investment if you died and owned a valid policy at the time of your passing.

Yet this article is not written in an actuarial sense, but rather in basic laymen’s language to allow the life insurance buyer to make an intelligent decision. Ultimately, in the most extreme sense we must consider that one can spend the premium amount and live past the premium term(s). One can also spend more for less insurance (whole life) and pass away earlier than expected. Could whole life insurance be your best investment if you live?

We are now talking in terms of living past a term for which you have contracted, or in simple fashion, purchasing life insurance when one simply doesn’t know when he or she will die, which includes the vast majority of us.

Just to touch on term insurance again, it will be more expensive to repurchase a term policy at a later age. Example, a man in his early- to mid- fifties, depending on his health (good to excellent) should be prepared to spend upwards of $2,000 annually for a term life policy of $750,000 to $1,000,000 for 15 to 20 years.

If you have achieved everything financially you wanted or needed to achieve during the original term for which you contracted, then you have succeeded. Otherwise, a term policy scenario can repeat itself several times.

We are talking in straightforward fashion of least expensive (premiums only) term versus richest (overall benefits) whole life. Whole life insurance, in terms of actual dollars put out is noticeably more expensive than term.

Lets say for the sake of conversation, that it is six times more expensive than term. Let’s emphasize that we are contrasting it with that first, or one term only, and discounting cash value, ongoing coverage and other factors.

To put it another way, your premium dollar, to begin with, will purchase about 1/6th of your term policy’s face value.

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