Whole Life vs Term Life Insurance
May 24, 2010 by Orlando Florida Magazine
Filed under Health & Wellness, In the News, Orlando Living
In search of discounts on Instant Life Insurance? There are many kinds of life insurance coverage on the market now.
When you consider all the kinds of life insurance policies available as a whole you can break it down into basically two types:
Term Insurance vs. Whole Life
Term Life Insurance is simple. It is basically pure life insurance. No different from car insurance it is just insurance with nothing else.
It is less expensive than if you wanted to buy Whole Life Insurance .
Depending on where you get your term life insurance policy from policy terms are available usually from 1 to 30 years of coverage or more..
Term Life Insurance :
- Pure Life Insurance
- Less Expensive of the two types of Life insurance
- Sold in time increments of 1 year to 30 years
If we are planning to purchase life insurance, from which insurer do we purchase a policy from? If you’ve decided to buy term life insurance then do insurance quotes comparison and choose the companies that appeal to you .
Check the insurer’s financial rating from the term quotes that you receive. Like a report card you will see A, B and C’s according to how strong their financial rating is with A being the best .
Example: Highest Rating / Financial Strength Rating of Company :
- Standard and Poor’s: A++ (Secure/Superior)
- A.M. Best: AAA (Extremely Strong)
- Moody’s: Aaa (Exceptional)
- Fitch: AAA (Secure/Highest)
Acceptable Financial Rating Strength
- Standard and Poor’s: S (Rating Suspended)
- A.M. Best: R (Regulatory Action)
- Moody’s: C (Lowest)
- Fitch: SR (Suspended Rating)
The 2nd of the two main types of life insurance is Whole Life Insurance .
Whole Life Insurance, if you are planning to purchase it is basically term insurance with an attached investment within the life insurance company. It is sold to families stating that they are investing to save for retirement or saving for their kids’ college fund. You’ll be surprised to see the difference in price when comparing to Term Life Insurance.
The insurer will make available to you many, many investment options that they offer within their company like savings, money market, mutual funds and some stocks .
Types of Whole Life Insurance :
- Traditional Whole Life Insurance
- Variable Life Insurance
- Universal Life Insurance
Those types of life insurance are directly related to the investment vehicles the policies are associated with .
Whole Life Insurance Time Period:
You are paying monthly life insurance premiums on the policy for the rest of your life .
Investment Vehicle: You can borrow from and pay back with interest . Your family will only receive the death benefit and none of the investment portion if something happens to you .
Essentially you are paying additional premium for an life insurance investment vehicle that you can ONLY borrow from but never receive .
Whole Life Insurance in summary:
- Adds an investment portion to Term Life Insurance
- Time period: Rest of your life
- Many Investment Options to Choose From
- If the insured person on the policy passes on family does not get investment portion
We highly recommend term life insurance coverage if you are seriously going to get a life insurance policy. With money that you save from purchasing Term Life insurance you go on and take those funds and place them in an investment vehicle of your choosing .
Our recommendation for Instant Life Insurance coverage :
Never mix any type of Life Insurance with any investment . They were never meant to go together .
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