The Experts View – When clients begin to look at life insurance, we recommend they take a good look at the Term Life insurance policies paired with a separate investment option.
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Here is the reason: The monthly premium it costs for a Whole Life policy is much greater than a Term Life. So much so, that if you were to take the difference that you would have spent to buy-up to the whole life policy and simply invest it, you would generally end up better off. This option gives you additional flexibility with your cash. This means if you need access to this money right away, you’re not asking an insurance company for it. The policy would still pay the beneficiary an amount similar to what a whole life policy would. If this sounds confusing please call us and we would be happy to discuss it further.
There are two important categories of life insurance that we provide services for in our office:
WHOLE LIFEWhole Life policies remain in force until the policyholder/guarantor fails to pay the premium (monthly cost) or the policy matures (Insured dies). Many Whole Life policies are combined with a money market type of investment. The policy pays a benefit based on the type of investments made by the insurance company. Many whole life policies generally don’t guarantee a specific rate of return or benefit amount.
TERM LIFETerm Life policies are only in effect for a fixed amount of time (1, 10, 20, 30 years). They are generally far less expensive than whole life policies. Prices are lowest with shorter terms and younger individuals, but these can still be great options for older individuals looking to protect their family.
Unlike current medical policies, life insurance requires extensive medical underwriting, including a physical. Life insurance can also be denied based on health condition. If you’re concerned about this, our best advice is to apply and proceed with the physical before ruling out the possibility completely.