There is an ongoing battle in the life insurance industry that includes term life insurance and whole life insurance. The industry survived the battle but consumers still asked the same questions. Which is better? The question is wrong because these two policies serve two different purposes.
The real battle is over the concept of buying a term and investing the difference or buying permanent life insurance. Proponents of the term buy and invest the difference suspect that the policyholder would be better off investing the difference in the premium costs it saves by purchasing a term policy rather than a full policy.
Permanent life insurance was not created to be an investment. It was created to take care of the need for permanent life insurance. The cash value accumulated in permanent life insurance is a plus rather than an investment advantage. The best life insurance portfolios are a mixture of permanent and life insurance.
Permanent Life Insurance – Permanent life insurance must be purchased to meet permanent needs. Final Expense and Retirement Life Insurance are the two basic necessities of permanent life insurance. Retirement life insurance is very important because it gives you more options to use retirement benefits for income than life insurance.
Term Life Insurance – Term life insurance is temporary. Term life insurance will supplement the permanent life insurance rule. Discounted period and ride rates can be added to your permanent policy to take care of temporary needs such as mortgage protection and short-term debt.
It is important that you understand why you are buying life insurance. You will be more satisfied when you have in mind the reason for your purchase. Do a small needs analysis. Think about what is important to you and what is important to you. Life insurance is a gift of love.