Term vs Whole Life Insurance: Which Is Right for You?

Deciding on life insurance may be the hardest part of adulting. Which type of life insurance makes the most sense: Whole Life or Term Life? What are the pros and cons of each one?
  1. Sheena says:

    thank you for this blog. I’ve been waiting for you to write something related to insurance.

  2. Lydia says:

    Great information! I have a term life policy and had no clue what it mean. Now I do with lot of clarity thanks to this post!

  3. Adriana Herrera says:

    I have a concern about life insurance,
    My grandmother mentioned to us how she had purchased 2 on different occasions due to the companies she had them with went bankrupt? Not to sure all the details. But honestly that has been my only concern about purchasing one.

  4. Katie says:

    My in-laws purchased and pay for a policy on our son, as a gift. Recently, they decided they couldn’t afford it anymore and wanted us to take it over. First, do people buy life insurance on a baby?its only $6/mo but I see it as an unneeded expense. Second, I noticed on my policy I have for $250,000 it states I would be given $130,000 of it. I’m going to call about this but do you know anything about not getting the whole chunk?

    • Rebeca says:

      Hello I’m a Retirement Income Certified Professional and can answer your questions.
      Buying a juvenile term policy does seem like an unneeded expense but I would purchase a smaller permanent insurance policy to cover at least funeral expenses which are running anywhere from $7k to $10k these days especially if you don’t have enough in your emergency fund to cover it. You don’t want to be in a situation where you have to create a “gofundme” page as I’ve seen too often.
      Personally, I wouldn’t go with term though because if you’re paying into something for so long you might as well get a permanent insurance policy that accumulates what they call “cash value.” We have $75k of whole life policies for each one of our kids from Northwestern Mutual which has a strong financial rating. Each one is about $30 and paid-up when they turn 65 but it lasts their entire life. When the child turns 18 (or whatever age after that) you can make the decision to continue paying for it or let them take over as the owner and they can decide if they want to continue making payments and accumulating the cash value, surrender the policy and use the cash for a car, down payment, wedding, etc or continue the policy and use the cash in the form of a loan. Permanent insurance can be a powerful asset in one’s portfolio because unlike investments the assets will never go down because its not tied to the stock market, the money is very liquid (as in you request it today and can get it tomorrow), and its meant for your low-risk dollars (saying this for people who say “buy term and invest the difference”)

      Great article, by the way!

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