Term Life Insurance

A term life insurance policy has a fixed death benefit and fixed premiums over a pre-set period of time. At the end of the term period, which can be 3 months, 10 years, 20 years, 30 years or more, the term life policy expires. If the insured person does not die during the term, no insurance claim is filed and no payment is made by the term life insurance company and the insurer retains the premiums paid into the policy. While other types of life insurance policies in this category may vary significantly from the standard policy, all term life insurance policies are temporary and expire at the end of the term period, with no cash value or investment potential like whole life insurance policies.

Term Life Insurance Pros and Cons

Term life insurance has two primary advantages: term life insurance policies are cheaper than other types of life insurance policies and are more flexible since term life policies can be used to cover a relatively short span of time versus permanent life insurance. Term life insurance can be purchased as supplement life insurance or as debts and liabilities increase over time, and can be cancelled or allowed to expire when obligations decrease, such as paying off a mortgage, business loans, or having kids graduate college.

Term life insurance disadvantages over other types of life insurance policies are that it has to be renewed or replaced, and the term life insurance rates may be higher based on your newer health, age, and medical history. If the insured person becomes ill or uninsurable during the initial term, he or she may be unable to qualify for a new policy and be left without life insurance protection in the future.

Types of Term Life Insurance Policies

While term life insurance does not build cash value like whole and universal life, there is a return of premium term life insurance policy, which refunds the premiums paid into the policy if the insured person survives the term. Other types of life insurance policies have decreasing or increasing premiums and benefits to better meet different needs and budgets. There are many types of life insurance policies in the term life category so policyholders can customize their coverage to give their families the best possible protection.

Other popular types of term life insurance include the following:

• High Risk Life Insurance
• Level Term Life Insurance
• Joint Term Life Insurance
• Short Term Life Insurance
• Instant Term Life Insurance
• Decreasing Term Life Insurance
• Increasing Term Life Insurance
• Renewable Term Life Insurance
• Group Term Life Insurance
• Child Term Life Insurance
• Senior Term Life Insurance
• Convertible Term Life Insurance

Whole Life Insurance

Whole life insurance is permanent and a standard whole life policy features a fixed premium and death benefit with a cash value feature that allows policyholders to save for retirement. The whole life insurance cash value is taken from a portion of the premiums paid into the policy and has a guaranteed minimum rate of return on investment, similar to a savings account but with a higher interest rate. The cash value can be used as security for low interest loans, so the insured person can borrow money from the policy while he or she is living without canceling the life insurance protection. Other types of whole life insurance policies have similar features but different payments or costs.

Advantages and Disadvantages of Whole Life Insurance

The two biggest disadvantages of various types of whole life insurance policies are the cost and the lack of flexibility. Policy limits or death benefits cannot be changed as life insurance needs change because whole life insurance is permanent and active for your lifetime. Additionally, because whole life insurance rates are constant for your entire life, whether you age gracefully or get sick at 30, whole life insurance quotes are not initially as cheap and affordable as term life insurance.

On the other hand, whole life insurance advantages begin with the cash value that accrues in whole life insurance policies, making whole life a great long term investment, especially since returns on cash value are tax deferred until they are removed from the policy. Since all types of life insurance policies in the whole life category are permanent, the company cannot cancel the policy due to the insured person’s age or health and the coverage is continuous.

If life insurance will be a part of your long term financial and retirement planning, consider the fact that financial advisors, planners, and experts have reported that, on average and over the long term, whole and term life insurance rates are comparable once you add in the fact that whole life insurance has a cash value feature that acts as an investment.

Types of Whole Life Insurance Policies

The different types of life insurance policies in the whole life category are much the same as standard policies but have various payment options. Limited payment whole life insurance and endowment life insurance policies are paid over a set term, perhaps 20 years, and remain in force for the balance of the insured person’s life. Single premium whole insurance is paid off at the policy’s inception and no further payments are due. The cash value can be used for low interest loans with no repayment terms so money in the policy can be used during the insured person’s life.

Other popular whole life insurance policies include the following:

• Graded Benefit Whole Life Insurance
• Guaranteed Life Insurance
• Modified Whole Life Insurance
• Survivorship Life Insurance
• Second To Die Life Insurance
• Life Insurance For Babies
• Life Insurance For Parents
• Family Life Insurance
• Whole Life Insurance For Children

Universal Life Insurance

Universal life insurance is a permanent policy with a cash value that is invested in financial instruments like stocks and bonds. The premiums are flexible with a minimum and maximum payment, allowing policyholders to pay the minimum when the budget requires, or to pay the maximum and contribute to the cash value when discretionary income permits. The more the policyholder pays into the policy, the more premium dollars are diverted to the cash value of the policy. If the cash value ever reaches zero due to investment failures or withdrawal of cash by the policyholder, the policy is cancelled, so types of universal life insurance policies are less permanent than whole life insurance policies.

Advantages and Disadvantages of Universal Life Insurance

This form of permanent life insurance is more affordable than whole life insurance, has flexible premiums and may pay higher returns than whole life. Since the investments are riskier, the policyholder faces a greater risk of loss of investment and most universal policies do not guarantee a rate of return; however, if the stock market performs well, universal life insurance offers high rates of return and can help you grow your nest egg for retirement faster than any other type of insurance policy.

Universal life insurance also allows policyholders to use the cash value as security for loans. However, unlike other types of life insurance policies, the amount of the death benefit is tied to the success of investments and may be less than the face value.

Types of Universal Life Insurance Policies

Some universal life policies, such as guaranteed universal life insurance, also known as GULs, guarantee a minimum rate of return on investment. Special types of universal life policies called variable universal life insurance policies allow policyholders to have several accounts in the same policy and make investment choices from a menu provided by the company. Some types of life insurance policies in this group offer a no-lapse guarantee, which means even if the universal life insurance cash value reaches zero due to investment failures, the policy remains in force. There are other options and types of life insurance policies available, as well as, such as indexed universal life insurance and variable life insurance.

Life Insurance Policies

The first step in buying a life insurance policy is to decide which category of life insurance best meets your personal needs and financial goals. Once a decision has been made as to term, whole or universal life insurance, consumers should review all the different types of life insurance policies within that group to see which ones are affordable and offer the best life insurance protection for their families.

When the time comes to compare life insurance quotes, policies, insurance companies, and coverage options, check out TheLifeInsuranceQuote.com. Just enter your zip code, choose from dozens of life insurance companies, and get free and instant life insurance quotes online. Whether you need a free term, whole, or universal life insurance quote, we help consumers compare all types of life insurance policies to find the best and cheapest coverage for your specific needs. Begin a life insurance quote now and see how affordable life insurance can be for you and your family.

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Different Types of Life Insurance

There are three basic types of life insurance: term life insurance, whole life insurance, and universal life insurance. Term life insurance is temporary insurance that only covers the named insured for a limited period of time, for example, 5, 10, 15, 20, 25, or 30 years, without building any cash value. Term life insurance policies must be renewed once the term period expires.

Universal life insurance and whole life insurance are permanent types of life insurance that do not expire or have to be renewed – permanent life insurance lasts a lifetime, has fixed life insurance rates, and death benefits. Each type of life insurance has different advantages and disadvantages that need to be reviewed. A life insurance quote online can be used to compare the pros and cons of different types of life insurance, as well as give potential policyholders an idea of the life insurance rates and costs associated with each type of coverage. Getting multiple life insurance quotes before purchasing a policy is the easiest way to guarantee you get the best coverage and lowest rates.

Whole Life Insurance

Whole life insurance features a fixed premium that never increases and a fixed death benefit. A life insurance quote online will show that compared to other types of life insurance, whole life insurance isn’t as affordable as universal and term life insurance, but that is because whole life insurance offers benefits other policies don’t.

Whole life insurance comes with a savings feature that returns some of the premiums to the policyholder – this is called the life insurance cash value. The insurance company guarantees a rate of return on the money in the cash value, which can be used as an investment to meet long term financial goals. The insurer cannot cancel a whole life insurance policy except in the case of non-payment of premiums. Learn more about whole life insurance.

Universal Life Insurance

A universal life insurance quote online will show a minimum and maximum premium. Universal life premiums are flexible and the more money the policyholder pays into the policy, the faster the cash value of the policy grows. Since the cash value is invested in riskier financial instruments like stocks and bonds, it is possible to lose your cash value in a universal life policy; however, if the stock market performs well, universal life insurance policies can provide the greatest returns on investment and make significant contributions towards your retirement nest egg. In some universal life policies, the death benefit is tied to the success of investments and may be less than the policy’s face value. Learn more about universal life insurance.

Term Life Insurance

Term life insurance is the most popular type of life insurance. Term life policies are temporary and only cover the person named on the insurance policy for the duration of the term period, which can be as little as three months and as long as 10, 20, or 30 years. Term life insurance policies have no cash value and if the insured person survives the term of the policy, no payments are made and the company keeps the premiums. Term life insurance is the cheapest form of life insurance when consumers compare life insurance quotes online. The length of the term is important when requesting a life insurance quote online, since shorter terms have lower rates because insurance companies are required to take less risk. Learn more about term life insurance.

How Much Life Insurance Is Needed

Even though financial advisors usually tell wage earners that they should have between 5 and 10 times their annual salary in life insurance, some individuals may not be able to afford the premiums for that amount in their budget. Some life insurance is better than no life insurance, so those with tight budgets can use a life insurance quote online to compare the rates for different amounts of life insurance until they find a rate that comfortably fits their financial situation. No family should be left totally unprotected if a wage earner dies prematurely. Are you asking yourself, “how much life insurance should I have?”

Supplementing An Existing Life Insurance Policy

During the course of a lifetime, life insurance needs change. A wage earner with financially dependent children needs more life insurance coverage than a retiree with few financial obligations and no dependents. During times of peak need, a term life insurance policy can be used to add extra coverage to an existing policy, whether it be a whole or universal life insurance policy. A life insurance quote online will show consumers how affordable supplemental life insurance can be. When the life insurance coverage is no longer needed, the term life policy expires so an individual never has to pay for more life insurance than he or she needs.

Getting A Life Insurance Quote Online

One of the easiest ways to compare the costs and coverage of different types of life insurance offered by insurance companies is to get life insurance quotes online. TheLifeInsuranceQuote.com offers consumers free life insurance rate quotes from multiple life insurance companies – without any obligations to buy and without dealing with sales representatives. Consumers simply enter their zip code, pick an insurance company, answer a few questions about themselves such as age and medical history, and we instantly offer them life insurance quotes. This makes it simple to compare the rates of different life insurers for the same coverage. It is also possible to check the rates of different types of life insurance and various amounts of coverage. A life insurance quote online makes comparison shopping for life insurance a snap.

Applying For Life Insurance Online

As soon as a consumer has received a life insurance quote online and decided on the policy and company for his or her life insurance, the next step they can take is to complete a life insurance application. Again, there is no obligation to buy a life insurance policy on the spot – if a future policyholder would like to continue comparison shopping, just restart the process and choose another life insurance company to get online quotes from. However, if you do like the policy, rate, and insurance company you found, feel free to purchase the policy online. You’ll actually be saving yourself the hassle of dealing with a sales representative or broker, as well as getting a cheaper rate because their commission won’t be added into your premiums.

Once the application is submitted, the insurance company may require that the individual undergo a medical exam to verify your health and medical history. The information on the application and the medical exam can affect your life insurance rates, making them higher or lower than the life insurance quote online. Just remember, life insurance quotes are only estimates based on limited information.

Life Insurance Medical Exams

Life insurance medical exams are paid for by the life insurance company and are intended to confirm that the person applying for life insurance is in good health. The doctor is hired by the insurer and may perform medical tests including blood, urine and other tests. The best life insurance companies require a medical exam, but it is possible to get a life insurance quote online for a no medical exam life insurance policy; however, beware that a life insurance quote will show no medical exam policies have higher rates than other life insurance policies because of the increased risk to the insurance company. No health exam life insurance policies may even have exclusions that prevent claims or payouts the first two years after a policy is issued.

Insurance Quotes Online

A life insurance quote online provides an estimate of the rate for the requested policy and coverage amount based on limited information. While actual life insurance rates may be higher or lower based on increased or decreased risk of death, life insurance quotes still accurately reflect the differences in the rates of different insurance companies. Reviewing our vast database of information on different types of life insurance policies is the first step to determining the best life insurance for your family; afterwards, get a life insurance quote to find the cheapest and most affordable rates available.

Enter your zip code, pick a life insurance company, and get free and instant life insurance quotes now to see how affordable your life insurance coverage could be.

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Term Life Insurance

Term life insurance is the best type of supplemental life insurance when your basic life insurance coverage is inadequate to cover your financial obligations and debts. Term life insurance policies offer temporary insurance that covers an insured person for a specified term period, which can be anywhere from 3 months, 5 years, 10 years, 15, 20, 25, or 30 or more years. Term life insurance features the cheapest premiums of any type of life insurance and the premiums remain fixed over the term of the policy. The temporary nature of term life insurance makes it more flexible than permanent life insurance policies and can be tailored to cover a person for only as long as supplemental life insurance is needed.

Why Do I Need Supplemental Life Insurance?

Many people buy a permanent life insurance policy to cover current obligations when they are young and healthy, usually without kids, a mortgage, car loans, future college expenses, or business debts. If a person marries and has children, there is a major change in their financial obligations and their existing life insurance policy may not provide enough protection, if they even have a life insurance policy at all. Supplemental life insurance kicks in when basic life insurance coverage runs out or hits the death benefit ceiling. Supplemental life policies offer additional payouts to beneficiaries to cover higher costs related to final expenses, such as funeral or medical bills, as well as living expenses, like mortgage payments, credit card bills, and college tuition.

A temporary term life insurance policy for a 20 or 30 year term will provide enough supplemental life insurance protection until children are financially dependent. The supplemental life insurance policy will then expire when the additional coverage is no longer needed.

Can I Get Supplemental Life Insurance For My Mortgage?

Mortgage life insurance is available to cover the amount of the loan if a homebuyer dies prematurely. Mortgage term life insurance is a special type of term insurance called decreasing term life insurance. Supplemental life insurance for mortgages is tailored to provide only enough coverage to pay off the mortgage loan, and both the death benefit and the premiums decrease over time. When the mortgage is paid in full, the mortgage life insurance policy expires and no further premiums are due. Mortgage life insurance is a common form of supplemental life insurance.

Supplemental Life Insurance For Business Owners

Businesses run on credit and, at times, the amount of outstanding debt may exceed life insurance coverage on the business owner. In order to protect investors and family members, supplemental life insurance to cover temporary large debts should be considered. Most business debts are short term and a term life policy for three months, six months, 1 year or 5 years, will cover the time until the debt is paid. Short term supplemental life insurance policies are very cheap and affordable, and provide extra protection as needed for businesses.

When Group Life Insurance Is Not Enough

Many Americans have group life insurance that is provided by their employers as part of a benefits package. For many workers, group life insurance policy limits are not enough to provide for their families if they should die prematurely. A supplement life insurance policy to make up any shortfall can ensure a family’s future without breaking the budget. Individuals should determine how much life insurance they need, deduct the amount of the group life policy and buy a supplemental life insurance policy for the remaining amount.

Supplemental Life Insurance Through An Employer

Some employers allow employees to buy life insurance over the limits of the benefits package the company/employer offers. The enrollment periods for additional life insurance are limited, usually 31 days following a major event like new job, marriage or birth of a child. This type of supplemental insurance is still part of a group plan and may have cheaper premiums than life insurance that is purchased privately. The disadvantage of this type of supplemental life insurance is that if a worker leaves his or her job, all their life insurance protection is cancelled.

Coverage For Unexpected Debts

Even the most careful financial planning cannot foresee every event and a serious illness, loss of a job or other crisis can result in unexpected debts. A supplemental life insurance policy can protect families from financial disaster by providing enough money to pay off the debts if a wage earner dies unexpectedly, while leaving the primary coverage intact so financial dependents are able to preserve their lifestyle. A decreasing term life insurance policy may be just the right supplemental life insurance for these situations.

Pros and Cons of Supplemental Life Insurance Policies

Individuals who already have life insurance may be able to prove insurability without having to undergo additional medical exams, so supplemental life insurance can be easier to get than a primary life insurance policy. Supplemental life can also be bought for a set period of time to cover specific obligations. Unlike permanent life insurance policies, supplemental policies do not return any of the premiums to the policyholder and if they must be renewed, the premiums for the renewal will be substantially higher.

Universal and Whole Life Insurance

While universal and whole insurance are considered permanent life insurance, when they are used as part of a long term financial plan, they can be an option for supplemental life insurance. These permanent policies accrue a cash value over time, which can be redeemed when the extra coverage is no longer necessary. When the cash value is redeemed, the policy is cancelled and voided. Whole life and universal life insurance are not as cheap and flexible as term life insurance, but represent a secure, tax-deferred investment while providing life insurance protection. In other words, if you are looking for an insurance policy with an investment option, whole and universal life insurance are good investments for your retirement needs.

Supplementing Basic Life Insurance With Permanent Life Insurance

If the need for extra life insurance is short term, whole and universal life insurance policies are not a good supplemental life insurance choice. For wage earners who are supplementing their basic life insurance for 20 or 30 years while their children are financially dependent, whole and universal life insurance may represent the best coverage and rates. When the coverage is no longer necessary, the policyholder can redeem the cash value to use toward college tuition or other expenses. If desired, the policyholder can keep the policy as an investment for retirement.

Supplemental Life Insurance

Supplemental life insurance helps provide protection when people have greater financial needs, but allows individuals to have the flexibility to change the amount of their life insurance as their needs change. Supplemental life insurance also allows policyholders to enjoy the advantages of different types of life insurance policies while minimizing the disadvantages, permitting policyholders to complement the pros and cons of term life insurance with the pros and cons of whole life insurance. Anyone who is not sure they have enough life insurance protection should consider buying a supplemental life insurance policy to give them peace of mind in case of a tragedy.

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Term Life Insurance

Term life insurance is the least expensive type of life insurance coverage. It is considered pure life insurance and does not offer any savings or investment features. In standard term life policies, the policyholder pays a fixed premium for a pre-set term which can be as little as three months or as long as 30 years. If the insured person dies within the policy period, the death benefit is paid to the beneficiary of the policy. If the person does not die within the policy term, the policy expires and the insurance company retains the premium payments. Learn more about term life insurance.

Term Life Insurance Policies

Some term life insurance policies offer return of premiums with interest if the insured survives the term of the policy. These policies are more expensive than standard term life and the interest rate on the accrued premium is not guaranteed. There are also increasing and decreasing term life policies. Increasing term life starts with a lower premium and death benefit which increases over the policy term. Other term life insurance coverage is available to meet the individual needs of different consumers. Learn more about different types of term life insurance plans.

Term Life Insurance Pros and Cons

The advantages of term life insurance coverage are its low initial rates and flexibility. Since term life is temporary, it must be renewed or replaced when the policy expires and rates for new policies can be substantially higher than the initial life insurance coverage. It has been estimated that over a lifetime, the cost of term life is about the same as that of whole life insurance, but term life has no cash value and no tax advantages. Learn how to compare term life insurance policies.

Whole Life Insurance

Standard whole life insurance coverage has fixed monthly premiums and a fixed death benefit which extends over the insured person’s lifetime. There is also a savings feature called the cash value. Part of the insurance premiums are returned to the insured in the form of the cash value which can be redeemed or used as security for low interest loans during the insured person’s lifetime. Interest and dividends paid on the cash value of insurance policies is tax deferred until the income is removed from the policy. Are you asking yourself “how does whole life insurance work?”

Payment Options For Whole Life Insurance Coverage

Consumers can opt for different payment options when buying whole life insurance. Some policies have limited payments where the policyholder pays premiums for a set amount of time, perhaps 20 years, and the policy is paid up and remains in effect until the insured person dies or the cash value is redeemed. Single payment life insurance coverage is paid in a lump sum at the policy’s inception. The policy is permanent and the cash value can be used for low interest loans with no income tax liability. Get whole life insurance quotes to review the different types of permanent life insurance.

Whole Life Insurance Pros and Cons

The major disadvantage of whole life insurance is that the initial rates are considerably higher than those of a term life policy with the same death benefit. Whole life insurance accrues a cash value over time and money earned on the cash value is tax deferred until it is withdrawn. Permanent life insurance coverage never has to be renewed or replaced and the rates are fixed and never increase. The cash value can be used as security for low interest loans with no requirement for repayment. Learn more about the pros and cons of whole life insurance.

Universal Life Insurance

Like whole life, universal life insurance is permanent life insurance coverage. It is less expensive than whole life insurance and has a minimum and maximum premium rather than the fixed payments of standard whole life. The cash value of the policy is invested in financial instruments like stocks and bonds and the value of the death benefit is tied to the success of the investments. If the cash value reaches zero due to investment failures, the life insurance coverage is cancelled. Compare term vs. universal life insurance to see which policy offers the best life insurance coverage for your needs.

Policy Options For Universal Life Insurance

Some universal life insurance policies guarantee a minimum rate of return on the cash value of the policy which makes them nearly as secure as whole life insurance coverage. Variable universal life insurance policies allow policyholders to make investment decisions by choosing investments from a menu provided by the insurer. Universal life insurance coverage has the same tax advantages as whole life insurance and may have a higher rate of return if the stock market performs well, but policyholders also face the risk of a loss on investments.

Universal Life insurance Pros and Cons

The flexible premiums of universal life allow policyholders to select the amount they can pay each month and if a policyholder is unable to make a payment, the premium can be withdrawn from the cash value. Universal life insurance coverage is permanent and the policy has a cash value with the advantage of tax deferred income. Unlike whole life insurance coverage, most universal policies do not guarantee a return on cash value and the policyholder may lose part or all of the cash value through investment failures. Learn more about the pros and cons universal life insurance.

Customizing Life Insurance Coverage

Each of the three categories of life insurance coverage has many policy options that allow individuals to customize their life insurance to meet individual needs and budgets. Consumers may also choose to buy more than one kind of life insurance policy in order to maximize the advantages of each to meet their needs and goals. Supplementing a whole or universal life insurance policy with a term life insurance policy helps policyholders get the benefits of cash value with the flexibility to change the death benefit as circumstances change.

Life Insurance Coverage

Everyone needs life insurance coverage, although coverage needs change over the course of a lifetime. While permanent life policies offer policyholders the opportunity to use some of the cash value while they are living, term life gives individuals the flexibility to change their life insurance coverage as financial obligations change. Consumers should educate themselves on all the benefits of life insurance coverage before buying a life insurance policy.

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What Is Permanent Life Insurance?

Permanent life insurance covers the insured person for their entire life. Permanent life insurance policies, like whole life insurance, never have to be renewed or replaced and will accrue a cash value over time. The returns paid on the cash value are tax deferred until removed from the policy and the cash value can be used as collateral for low interest loans. While a permanent life insurance quote shows a higher rate than term life insurance, part of the premiums are returned to the policyholder in the form of the cash value. Term life insurance is temporary life insurance, and expires when the term period ends, with no investment potential, which should be considered when pricing life insurance. Keep in mind the different types of policies available when getting permanent life insurance quotes.

Types of Permanent Life insurance

Before requesting a permanent life insurance quote to compare rates, policies, death benefits, and insurance companies, consumers should be familiar with the different types of permanent life insurance. The two basic categories are whole life insurance and universal life insurance, while some experts place variable universal life insurance in a third category. Permanent life insurance never has to be renewed and never expires, thus, like its name, makes it permanent life insurance. A permanent life insurance quote, whether it is a whole life insurance quote or universal life insurance quote, can help individuals decide which type of life insurance best meets their family’s needs, financial goals and budgets.

Whole Life Insurance

Whole life insurance features a fixed premium that remains the same over the insured person’s lifetime. Whole life policies have a savings feature that pays a guaranteed rate of return and some policies, such as participating life insurance policies, also pay annual dividends. Whole life insurance policies have different payment options including the limited payment policy which becomes paid up over a specified period of time and the single payment whole life policy that is paid in a lump sum at the policy inception. A permanent life insurance quote can help consumers find the best whole life insurance options. Learn more about whole life insurance, and the policy’s pros and cons.

Universal Life Insurance

The unique feature of universal life insurance is the flexible premium. Policyholders have a minimum and maximum premium rather than a fixed premium. The more premium the policyholder chooses to pay; the more money is diverted into the cash value of the policy. Universal life policies invest the cash value in financial instruments like stocks and bonds which are riskier than the secure investments of whole life. A universal life insurance quote usually shows the minimum and maximum payments for the policy. Learn more about universal life insurance pros and cons.

Variable Universal Life Insurance

Variable universal life insurance is sometimes considered a separate form of permanent life insurance. A variable life insurance policy allows policyholders to make investment choices for the policy cash value. The policyholder can choose one or more options for investment from a menu supplied by the insurance company. The death benefit of these policies is tied to the success of the investments and may be less than the policy’s face value. Only people with investment experience should request a variable universal life insurance quote.

Permanent Life Insurance As An Investment

As a permanent life insurance quote will show, the initial investment in a permanent life insurance policy is much lower than the initial cost of many other investment instruments. Since there is no income tax on life insurance, returns are deferred until they are withdrawn from the policy and they have an advantage over other investments. Loans against the cash value of life insurance policies are not considered income. A permanent life insurance quote can help individuals decide on whether to invest in whole or universal life insurance. Consumers can learn more about whole life insurance as an investment here.

Permanent Life Insurance For Children

Life insurance for children is very cheap and these whole life insurance policies make wonderful gifts for children. Special whole life policies, called endowment life insurance, are paid for a limited term of 15 or 20 years. At that point, the whole life insurance policy reaches maturity and the child can redeem the cash value to help pay expenses like college tuition or a down payment for a house in the future. It is easy for a parent or grandparent to get life insurance quotes online to compare rates and policy options for endowment life insurance, or another type of child life insurance.

Permanent Life Insurance For Retirement

Financial experts are advising people saving for retirement to invest in tax-deferred whole, universal or variable life insurance policies. The tax advantages of these life insurance policies can save individuals money when they retire. It is possible to borrow up to 90% of the cash value of the policy in low interest loans with no repayment terms. Since loans are not income, seniors do not have to pay taxes on the money, making life insurance an alternative way to save for the future when considering retirement investments.

Life Insurance Quotes Online

The easiest way to get permanent life insurance quotes is from a life insurance website. TheLifeInsuranceQuote.com offers life insurance quotes online from multiple insurance companies so that consumers can compare rates, policies, and coverage options side by side. An individual who wants a life insurance quote simply answers a few questions and free quotes are available instantly. A permanent life insurance quote is also a good way to compare the rates for different types of policies, such as term vs. whole life insurance or term vs. universal life insurance, and different policy amounts or death benefits so consumers can find affordable policies that meet their needs.

Find Out More About Permanent Life Insurance

Though TheLifeInsuranceQuote.com offers online life insurance quotes, we also have hundreds of helpful and informative articles about various permanent life insurance policies. Different types of policies allow individuals to find the best life insurance options to meet their future goals and present needs. Many financial advisors believe that a permanent life insurance policy is an important part of financial planning. Finding the right policy is as important as finding the right price with permanent life insurance quotes.

Permanent life insurance offers investment and tax advantages to policyholders while they are living; benefits that can offset the difference in cost between permanent and term life insurance policies. Both universal and whole life insurance quotes will help consumers decide if permanent life insurance coverage is a good choice for their lifestyle.

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Additionally, prior to purchasing term life insurance, consumers should get multiple free instant life insurance quotes online to compare policies, coverage options, insurance companies, and rates, thereby ensuring they have done their research and are guaranteeing themselves the best term life insurance and rates.

No Smoking

People who smoke have a shorter life expectancy than those that do not smoke, so non smokers get better life insurance rates than smokers. Those who quit smoking increase their life expectancy and decrease their monthly life insurance premiums. There is an added benefit for smokers who quit, they reduce their risk of serious health problems and lower their monthly health insurance premiums, too. By quitting smoking, consumers can get the cheapest and best term life insurance quotes.

Losing Weight

Obesity shortens lifespan, perhaps even more than smoking, so individuals who are overweight will not get the best term life insurance rates. Obesity is associated with chronic diseases like diabetes type II, coronary artery disease, congestive heart failure and clinical depression. Reducing weight increases lifespan and lowers the odds of suffering from a chronic medical condition. Like non-smokers, people who lose weight get cheap term life insurance quotes.

Getting Regular Exercise

Individuals who exercise regularly, for at least 30 minutes 3 times per week, improve their cardio-vascular health and reduce their chances of suffering from coronary artery disease, heart attacks and strokes. Good health habits will get the best term life insurance quotes at any age. Non-smokers of average weight who exercise regularly will get the best possible rates on both life insurance and health insurance. People with good health habits save hundreds, perhaps even thousands of dollars over a lifetime with cheaper insurance rates and medical bills, not to mention, simply living healthier, and happier lives.

Annual Medical Check-ups

Regular medical exams are another way for individuals to increase their life expectancy since any illness is likely to be discovered early when it can be treated. Getting regular medical exams lowers the risk of death from many types of cancer which can be successfully treated if discovered early. Anything that increases life expectancy helps people get cheap term life insurance. Annual medical exams improve overall health and may reduce life insurance rates.

Life Insurance Rates By Age

Since the younger a person is the lower his or her life insurance rates will be, planning ahead and buying life insurance at a young age will guarantee the best term life insurance quotes. Term life insurance rates are based on the chances that a person will die during the term of the policy. A 20 year old who buys a 30 year term life insurance policy is less likely to die within the policy term period than a 40 year old with a 30 year term policy. The best term life insurance quotes go to those who buy their life insurance when they are young and healthy.

Finding Discounts

While there are not many ways to get discounts on term life insurance, buying all your insurance needs from one insurance company can get consumers the best term life insurance quotes. Bundling discounts, or multi-policy discounts, are given to individuals who buy several policies, like home, auto, health and life insurance, from one company. The discounts can be as much as 25% on each policy so it pays to bundle insurance policies. For consumers who want the best life insurance quotes, it is smart to compare rates and coverage online from other companies, and then check with the company that insures your home or car for bundling discounts, using online quotes from other carriers in your negotiation.

Making Annual or Semi Annual Payments

When life insurance premiums are paid monthly, there is a finance charge included in the payment. Getting the term life insurance quote for annual or semi annual premiums can make life insurance rates cheaper and save a substantial amount of money. To get the best life term life insurance quotes, people should compare the premiums the annual or semi annual premium rate against the monthly rate. It is important that the premiums be paid on time to avoid any lapse in life insurance protection.

Term Life Insurance Quotes For Group Policies

Group term life insurance rates are usually lower than rates for individual policies, but group life insurance may have limits on the amount of insurance that can be purchased. Most group term life policies are bought through employers, professional organizations or associations like AARP. The best term life insurance quotes are on group life insurance, but it may be necessary to supplement group policies with additional coverage, whether it be term, whole, or universal life insurance. It is best to compare the rates for a term policy that has all the necessary coverage before buying a group policy that needs to be supplemented.

Buying The Right Amount of Coverage

While it is essential to carry enough term life insurance coverage to meet financial obligations, getting too much life insurance will not get you affordable rates, and may even burden your budget in the long-run. Wage earners should usually carry a policy equal to between 5 and 10 times their annual income. Examine all financial debts and liabilities, such as your home mortgage, credit card and medical bills, and education costs, and determine how much insurance is needed to cover those obligations, including final or funeral expenses. Policyholders should consider subtracting the amount in savings or retirement, or have the option to simply leave that amount as a buffer for additional debts incurred in the future. Comparing life insurance rates for policies with different death benefits, or different amounts of life insurance, is one benefit to getting life insurance quotes using TheLifeInsuranceQuote.com.

Compare Life Insurance Quotes Online

Comparison shopping is a great way to get the best prices and it is quick and easy to compare the best life insurance quotes online. TheLifeInsuranceQuote.com offers life insurance quotes from multiple insurance companies so consumers can compare rates to find the best term life insurance quotes. Consumers simply answer a few questions, and term life insurance quotes are instant and free. Even the best life insurance quotes are only estimates so actual rates may be higher or lower than the rates quoted.

There are many factors that affect life insurance rates and individuals cannot change their occupation or their family medical history to get lower rates, but they can take steps to improve their health and increase their life expectancy to get the lowest rates possible. Anyone can get the best life insurance quotes by taking proactive steps to find the lowest rates for the life insurance they need.

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Why Buy Second To Die Life Insurance?

Second to die life insurance is most often used in estate planning. Survivorship life insurance can be used as a tool to provide a trust for the care of a special needs child after both parents have died, to pay for education or college for children under the age of 18, leave a significant gift to a favorite charity, or to pay estate tax and income taxes for heirs of affluent couples. Since life insurance benefits are not taxable, a second to die policy will keep the bulk of the estate intact for heirs. Second to die life insurance is cheaper than insuring two spouses with separate life insurance policies, while providing for the needs of surviving heirs.

If A Spouse Cannot Qualify For Life Insurance

If one spouse cannot qualify for a separate life insurance policy, second to die life insurance may be an option. Since two people are insured on this type of policy and second to die life insurance makes no payments until the second person dies, this type of life insurance may be easier to qualify for life insurance coverage. A second to die life policy is only practical if the surviving spouse will have adequate funds to live on when the first spouse dies, since payment is only made on the death of the second spouse. If the second spouse will need the proceeds of a life insurance policy upon the death of the first, buying two separate life insurance policies is better.

Protecting Family-Owned Businesses

Businesses with sizable assets need protection from estate and income taxes when the owners die. A spouse can transfer business interests to the surviving spouse on his or her death without any tax liability, but when the second spouse dies, the taxes due fall to heirs and can decimate the assets of the business. A second to die life insurance policy can be used to cover estate and income taxes and preserve the business for surviving family members or beneficiaries. Protecting a family owned business is one of the most common uses for second to die life insurance, or survivorship life insurance.

Business Partnerships

Business partnerships are often small concerns, much like family owned businesses. If the partnership is designed to prevent the heirs of either partner from claiming business assets at that person’s death, a survivorship life insurance policy may be a good choice. The business must be able to continue with only one of the partners and the insurance should be sufficient to cover inheritance taxes for heirs, but second to die life insurance can work for estate planning for business partners in the same way it works for married couples.

Is Second to Die Life Insurance A Good Choice?

A good estate planner may be able to mitigate tax liability for heirs and may even advise a couple to buy a second to die life insurance policy. Some life insurance policies have a rider that allows the second to die life insurance policy to be split in the event of a divorce, but some do not, so it is wise to thoroughly review the policy before buying it. Each life insurance company creates and develops its own model, coverage plans, and terms and conditions. Estate tax laws may change, making the policy unnecessary, but for those who want to ensure that an estate or family owned business remains intact for their heirs, second to die life insurance is a good choice.

Get Free Rate Quotes For Survivorship Life Insurance

TheLifeInsuranceQuote.com offers free and instant life insurance quotes online for policyholders looking to compare rates, coverage options, and insurance companies before buying second to die life insurance. By comparing life insurance quotes online, potential consumers can see what life insurance companies and policies are available, quickly get rate quotes, and find the best, yet cheapest life insurance available.

Individuals simply answer a few questions and the life insurance quotes are provided instantly and free. Getting the best rates on life insurance is another way to help preserve an estate, and comparing rates is the best way to get the lowest prices on second to die life insurance, or any type of life insurance policy you may be interested in.

Second to die life insurance is not the best choice for every couple, but couples who want to keep their assets intact for their heirs can benefit from using survivorship life insurance in their estate planning. A professional financial advisor can help couples decide if second to die life insurance is the best way to preserve their assets or family owned business.

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In the article below, you will learn about the different types of life insurance, their pros and cons, how much life insurance you need, and all the basics of life insurance needed to help you find the best and most affordable life insurance policy for you and your family’s needs. After you’ve gotten an idea of how to compare life insurance policies, we highly recommend potential policyholders get free, instant life insurance quotes online to see how much life insurance they can afford. Just enter your zip code, choose an insurance company, and begin a life insurance quote now.

Term Life Insurance

When consumers compare life insurance, they will find that term life insurance is the cheapest type of life insurance and offers the greatest amount of flexibility. Standard term life insurance offers fixed life insurance rates and death benefits over a pre-set period of time. The term can be from 3 months, 10, 20 or 30 years, but when the term period is up, if the insured person has not died, term life insurance makes no payments, payouts, and does not build any cash value, and simply expires. When individuals compare life insurance, term life insurance is temporary while other types of life insurance offer permanent protection.

Universal Life Insurance

Universal life insurance is a type of permanent life insurance with flexible premiums based on a minimum and maximum life insurance rate – as long as you continue to pay the minimum premium, the universal policy maintains its good standing; however, no equity is built and the cash value does not grow. The universal life insurance cash value is invested in financial instruments like stocks, bonds, and mutual funds and the more premium the policyholder pays into the life insurance policy, the more money is put into the investment account. If people compare life insurance as an investment, whole life insurance represents a more secure investment, but universal life insurance may yield higher returns. Returns on both types of policies are tax-deferred until they are withdrawn.

Whole Life Insurance

Whole life insurance is another type of permanent life insurance policy offering fixed rates/premiums, a fixed death benefit and whole life accrues a cash value that has a guaranteed rate of return, risk-free. When consumers compare life insurance rates, they will find that whole life insurance has the highest initial premiums, but over the long run, life insurance experts estimate that whole life vs. term life insurance rates are comparable, especially when taking into consideration the whole life insurance cash value and the higher renewal term life insurance rates. When individuals compare life insurance features of whole and term life, they will find that both whole and term life insurance has pros and cons; whole life is permanent life insurance, is a good investment for retirement by offering a stable rate of return, and never needs to be renewed, but term life insurance is flexible with cheap rates locked in for the term period of the policy.

Understanding Life Insurance Rates

Life insurance rates are based on the age, lifestyle habits, and medical history of the insured person at the time the policy is purchased, as well as the type of life insurance and the term of the policy, which for permanent life insurance, is the person’s average expected life span. When consumers compare life insurance for a 20 year old person, the rates for term life insurance, even for a 30 year term life insurance policy, will be less than the rate for whole or universal life insurance. If consumers compare life insurance rates, the fixed rate of a permanent policy bought at age 20 may be less the rates for a term renewal at age 50.

Though cheap rates may make term life insurance more appealing at first, life insurance experts advise that term vs. whole life insurance rates in the long term are comparable, and by comparing renewal costs and a whole life insurance policy’s cash value, families will pay about the same in the long term whether they buy term life insurance or whole life insurance.

How Much Life Insurance Is Necessary

As a rule, wage earners with financial dependents should have life insurance equal to between 5 and 10 times their annual salary. Young single men and women should have enough coverage to pay off outstanding debts like student loans, car loans, outstanding liabilities, and funeral costs. Most seniors only need a small life insurance policy to cover any final expenses. When consumers compare life insurance, they can compare the rates for different amounts of coverage, but unless the insurance policy is an investment, potential policyholders should only buy the coverage they need.

Buying Whole Life Insurance As An Investment

If consumers compare life insurance policies, they will see that financial protection is not the only reason to buy whole or universal life insurance. Permanent policies like whole life insurance with a cash value offer a secure investment with tax-deferred returns and can be an important part of financial planning. The whole life insurance cash value can be used as a down payment on a home, college tuition, or to secure a loan, helping families meet financial goals. When people compare life insurance by getting free, instant life insurance quotes online, they find that permanent life insurance policies such as whole life insurance can be an excellent long term investment for retirement.

Supplemental Term Life Insurance

The cheap rates and flexibility of term life insurance make it a perfect choice when additional life insurance is needed to cover debts or periods of time when financial needs are greater. Term life insurance policies can be used to cover debts like mortgages and business loans or to add extra protection during the years individuals have dependent children. When potential consumers compare life insurance rates, they will see that term life insurance has lower rates than permanent forms of life insurance – though price should never be the only consideration when determining the best type of life insurance for your needs. Term life insurance can create a bridge so consumers never have to pay for more life insurance than they need.

What Kind of Life Insurance Is Best?

The only way an individual can determine which kind of life insurance is best is to compare life insurance policies to see which ones best meet his or her needs and financial goals. If the goal is simply to provide temporary protection, term life insurance is a good choice. However, people who want to invest to meet financial goals may find permanent life insurance, such as whole life insurance, is a better option. Financial considerations may influence the choice of some consumers so it is important to compare life insurance rates using online life insurance quotes. Just enter your zip code to begin a free quote now.

How To Get The Most From Life Insurance

Since no one life insurance policy can meet all the changing circumstances and needs that occur during a lifetime, the way to get the most from life insurance may be to buy more than one kind of life insurance policy. While permanent whole or universal life insurance is a good basic policy, term life insurance policies can supplement basic coverage as need. When consumers compare life insurance policies they may find, that from the standpoint of providing the right amount of protection, buying different policies can be a great solution to buying the best life insurance for your needs.

Compare Life Insurance Rates

The easiest way to compare life insurance rates for different policies and insurance companies is online. TheLifeInsuranceQuote.com offers free and instant life insurance quotes from multiple insurance companies so consumers can compare life insurance policies and rates to see which policies best fit their needs and budget. To request life insurance quotes, an individual simply enters their zip code, choose a life insurance company, completes a short questionnaire and receives a free quote.

Consumers can choose from dozens of the best life insurance companies and can get as many life insurance quotes as they want. When potential policyholders compare life insurance quotes, they save money on the life insurance they need. And even if you are not ready to buy life insurance now, comparing life insurance quotes online can help potential consumers get an idea of the types of life insurance, coverage options, rates, and insurance companies available.

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More specifically, family’s should have a life insurance death benefit between 5 to 10 your annual income, and policyholders should account for mortgage payments, credit card bills, medical bills, funeral expenses, children’s education and tuition costs, and a retirement package for your spouse to cover daily living expenses. Using different types of life insurance policies, such as term, whole, universal, and variable life insurance, can give individuals and families greater flexibility when determining how much life insurance you should have.

Young Singles Need Life Insurance

Many young, healthy single people do not believe they need life insurance, but young people often start out with substantial debt from student loans, car loans and other major purchases, even mortgage loans. How much life insurance a single person needs is based on the total amount of outstanding debt plus $10,000 to cover final expenses, such as medical bills and funeral expenses. This is because existing family members may have co-signed on a loan with their children and could be liable for any outstanding payments or the loan balance if the individual dies.

In addition to considering how much life insurance is needed, young singles should think about future financial goals and consider buying permanent whole life insurance when they are young, healthy, and life insurance quotes are cheapest. Buying life insurance at a young age can help individuals start saving early and accumulate wealth over time.

What If My Life Insurance Needs Change?

How much life insurance a person needs will change over the course of their lifetime. One way to deal with changing circumstances is to buy a whole life insurance policy when you are young and supplement that policy with term life insurance, when necessary, to cover new debts, loans or financial obligations. Whole life insurance policies are permanent and accrue a cash value over time that can be used to meet financial goals. Temporary term life insurance policies can provide extra life insurance coverage as needed.

How Much Life Insurance Should A Working Parent Have?

Wage earners with financial dependents not only need enough life insurance to cover their debts and final expenses, but they need to provide for their surviving dependents, including spouse, children, and may even their own parents. Financial planners or advisors and life insurance experts generally recommend that wage earners have a minimum amount of life insurance that is equal to 5 to 10 years of income. Temporary term life insurance is a good choice for wage earners with dependents since the need for additional life insurance is highest when your children are born and gradually diminished as they become independent, graduate school or college, and begin to live on their own. For this typical situation, a 20 year term or 30 year term life insurance policy is best because term rates are very cheap, the policy provides coverage when you most need it, and then expires as liabilities begin to decrease.

How Much Life Insurance Does A Stay at Home Parent Need?

Even though stay-at-home parents may not earn a wage, they contribute valuable services to the household, including child care, laundry services, cleaning, meal planning and preparation, and shopping. Couples with children should consider how much these services would cost if the parent was no longer there to perform them. Once an annual figure is reached, multiply that amount by between 7 and 10, depending on the ages of the children, and that is how much life insurance a stay at home parent should have.

Why Do Seniors Need Life Insurance?

Most seniors have paid off their debts in preparation for retirement and do not have dependent children, but they still need life insurance. How much life insurance seniors need depends on their financial circumstances. For seniors with a modest estate, a $10,000 term life insurance policy is usually enough to cover final and medical expenses. More affluent seniors may choose to carry enough life insurance coverage to pay estate taxes for their heirs since the proceeds from life insurance are not taxed, and the proceeds can be used to pay off any taxes charged by the government when the estate changes hands to the heirs.

Covering A Mortgage with Life Insurance

A home is the biggest purchase most families ever make, so it is important to ensure that the mortgage will be paid if a wage earner dies prematurely. How much life insurance an individual needs to cover the balance of a mortgage decreases over time as payments are made. For debts like mortgages, there are policies called decreasing term life insurance or mortgage term life insurance. For decreasing term life insurance or mortgage term life insurance, the premiums and death benefit are not fixed and decrease over the term period as the debt is paid and decreases. This is extremely beneficial because, as the life insurance death benefit decreases to cover only the remaining portion of your mortgage, your life insurance rates also decrease because you do not need as much coverage each month. Decreasing term life insurance helps people avoid paying for more life insurance than they need.

Decreasing term life insurance is also used by banks and financing companies when entrepreneurs/business-owners are financing deals and the lender wants a personal guarantee or life insurance to ensure payment of the business or commercial loan.

Why Buy Life Insurance For Children?

There are whole life insurance policies called endowment policies that are perfect gifts for newborn children. An endowment policy is a type of limited payment whole life insurance that accrues cash value as a child grows. When the child reaches 18, 21, or 25, they can redeem the cash value of the policy to help pay expenses like college tuition, a car loan, or a down payment on a house, or they can convert the endowment policy into traditional whole life insurance with low premiums. How much life insurance a parent or grandparent should buy for a child depends on their financial circumstances and how much money they went to offer the child when he/she grows up. Whole life insurance for children can almost be compared to a trust fund in many aspects.

Life Insurance As An Investment

Permanent life insurance policies like whole life and universal life insurance can play an important role in financial planning. How much life insurance an individual buys as an investment depends on their financial goals. Permanent life insurance is a long term investment that is great for retirement planning or saving for a child’s education. Few investments offer the security and stability of whole life insurance and its ability to produce a guaranteed rate of return; meanwhile, universal life insurance offers greater risk for greater returns by investing in the stock and bond markets. Since interest and dividends on life insurance are tax-deferred until they are removed from the policy, your life insurance investment will continue to grow quicker and larger faster, making the tax advantages of life insurance very attractive. Learn more about life insurance as an investment.

Life Insurance As A Tax Shelter

A single payment whole life insurance makes an excellent tax shelter for older, affluent individuals. The cash value in a whole life insurance policy is fairly liquid and can be withdrawn or used for security for no- interest loans. Since loans are not considered income, no taxes are paid and there are no repayment terms on life insurance loans. How much single payment life insurance an individual buys depends on how much money they want to put in a tax-free investment for retirement.

What Kind of Life Insurance Should I Buy?

Since permanent life insurance policies have fixed death benefits, individuals cannot adjust the policies to meet their life insurance needs as the financial situation in their lives change. For many people, the answer is to supplement permanent life insurance policies with temporary term life insurance policies. How much life insurance a person needs changes as the circumstances of their life change. Young singles and retired seniors need less life insurance than couples with dependent children, a mortgage, credit card bills, and tuition costs.

Life Insurance Quotes

Hopefully throughout this article, we’ve provided you some ideas, suggestions, and factors to consider when determining “how much life insurance should I have?” How much life insurance you need depends on your current and future financial assets, liabilities, and goals. Since obligations change over the course of a life, your life insurance also needs to change. The next step is to actually get a life insurance quote so potential consumers and policyholders can determine how much life insurance protection they can afford.

TheLifeInsuranceQuote.com offers consumers the ability to compare life insurance quotes online by simply entering a zip code and choosing a life insurance company. This will help consumers compare life insurance rates, policies, coverage options, different types of life insurance, and companies to find the best, cheap life insurance available to fulfill their needs. Even if you are not ready to buy life insurance right now, a free life insurance quote can help you see what is generally available in the market, and how much of a life insurance death benefit you may be able to afford given your current budget. Just enter your zip code, and begin an instant life insurance quote now to learn more.

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When comparing term life vs. whole life insurance, both have pros and cons that make each the best life insurance for a family with specific needs and future financial goals. Learning about each type of life insurance and then getting free, instant life insurance quotes online to compare rates, policies, coverage, and insurance companies is the only way a potential policyholder will know whether they are buying the best and most affordable life insurance.

What Is Term Life Insurance?

Term life insurance is temporary insurance that covers an insured person for a specified period of time, which can be anywhere from 3 months to 30 years. If the insured person does not die within the policy period, no payments are made and the insurance company retains the full amount of the premium payments; otherwise, if a tragedy does occur and the policyholder dies, the term life insurance company will payout the death benefit to the beneficiaries.

In the event that an individual still needs life insurance when the policy expires, a new term life policy will have to be applied for and purchased, usually at higher rates that are adjusted for new medical conditions and the policyholder’s older age. Term life insurance policies with shorter terms are cheaper, but new policies will have increasingly higher costs as the insured person grows older. Buying a 30 year term life insurance policy at a young, healthy age is usually the best way to get the cheapest life insurance rates and get insurance coverage for most of your life.

Advantages of Term Life Insurance

When comparing term life vs. whole life, term life insurance has cheaper initial premiums for young individuals, making it more affordable for young families or individuals with limited incomes. If the term life policies are renewed, the amount of the death benefit can be increased or decreased, making it more flexible than the fixed death benefit of whole life insurance. Term life insurance is an inexpensive and flexible way to cover financial obligations that have a definite time limit, like mortgages and loans, and ensure survivors are not left with debts or loans they may be unable to pay off.

Disadvantages of Term Life Insurance

While the premiums of term life insurance are cheap, in a comparison of term life vs. whole life, whole life insurance returns a portion of the premiums, with interest, in the form of a cash value or equity, while term life insurance offers no return of premiums. Because whole life insurance is permanent, payment of the death benefit is guaranteed. Term life only pays the death benefit if the insured person dies during the policy period.

When comparing the total cost of term life vs. whole life insurance rates, life insurance experts estimate that, in a lifetime, term and whole life insurance premiums are comparable due to the fact that whole life insurance is an investment with a return, and term life insurance rates increase with age. Again, term life insurance is the most popular type of life insurance, and for a good reason, but some families may find that whole life insurance better suits their financial and future needs.

What is Whole Life Insurance?

Whole life insurance is permanent insurance which cannot be cancelled by the insurance company unless the policyholder fails to pay the premiums. Whole life insurance features a fixed premium and death benefit that does not increase or change as the insured person ages. Part of the premiums of whole life insurance are put into an equity account called the whole life insurance cash value. A guaranteed rate of interest is paid on the cash value, which appreciates over years and can be withdrawn or used as security for low or no-interest loans. Overall, whole life insurance as an investment is considered to be a good one, and can help force families to save for retirement.

Advantages of Whole Life Insurance

Since whole life insurance is permanent, it does not expire and cannot be cancelled due to age or illness. In a term vs. whole life comparison, this means that, if for any reason, the insured person becomes uninsurable, the whole life insurance policy will still provide protection, but a term life policy will expire and the person may be unable to buy new life insurance. When comparing term life vs. whole life, the cash value feature is a whole life insurance advantage that can provide income in emergencies, help meet long-term financial goals such as a down payment on a home. If the cash value of the whole life insurance policy is withdrawn, the equity does not even need to be paid back, and will simply be subtracted from the death benefit payout in the future.

Disadvantages of Whole Life Insurance

Whole life insurance has a fixed death benefit which cannot be increased or decreased as the need for life insurance changes over the course of a person’s life. When comparing term life vs. whole life insurance rates, term rates are usually more affordable for young people than whole life insurance. The premiums continue over the insured person’s entire life, which can present a hardship to older individuals who live on fixed incomes; however, when considering term life vs. whole life insurance, the term life premiums for older people may be higher than those of a long-term whole life insurance policy. When comparing the pros and cons of term life insurance and whole life insurance, just remember to take into consideration every detail, especially the whole life insurance cash value.

How Life Insurance Premiums Are Calculated

The premiums on life insurance use the age of the applicant, the health issues or medical conditions of the potential policyholder, the length of the policy term and the value or death benefit of the policy to determine your life insurance rates. Term life insurance policies have lower premiums for young applicants, but when new life insurance policies have to be purchased, premiums can be significantly higher, though that may be an issue some policyholders and families will want to deal with in the future instead of now.

Whole life insurance rates are higher than term life rates in the early years of the policy, but a portion of the premiums are returned to the insured as cash value, offsetting those higher premiums and offering good, long term value. Since whole life premiums never increase, over a lifetime, life insurance experts and financial advisors suggest the cost of term life vs. whole life is about the same.

Modified Whole Life As An Alternative To Term Life Insurance

When comparing the advantages of term life vs. whole life, term life offers lower initial cost and more flexibility, but whole life insurance provides permanent coverage and long term investment potential. One alternative is modified whole life insurance, which offers lower initial premiums that increase over time. The death benefit is still fixed, but for individuals that want the investment advantages of whole life insurance and expect their income to increase in the future, modified whole life insurance may be the best type of life insurance to buy.

Term and Whole Life Insurance Can Provide Complementary Coverage

Since the biggest disadvantage of whole life insurance is its lack of flexibility, using term life insurance to supplement a whole life insurance policy can provide enough extra insurance when life insurance needs are greatest. When needs decrease, the term life policy can be allowed to lapse while the whole life policy continues to provide coverage. Instead of comparing term life vs. whole life, it is often smarter to use the advantages of both term life and whole life together to give families the best possible protection.

Term Life Insurance vs. Whole Life Insurance – Conclusion

Comparing term life vs. whole life shows that whole life has a number of long-term advantages for financial planning. While term life insurance has more flexibility for adjusting death benefits, over long periods of time it provides no real financial advantage and can be most expensive when individuals are facing a reduction of income due to retirement. Whole life insurance can provide tax advantages and income for retirees, so when considering term life vs. whole life insurance, whole life is usually the best choice for a primary policy.

While whole life insurance has a number of advantages over term life, the greatest flexibility and protection may be obtained by supplementing permanent whole life with temporary term coverage when financial obligations require the greatest amount of life insurance coverage. Instead of looking only at term life vs. whole life, the best approach may be to use whole life and term life insurance to meet changing life insurance needs.

Life Insurance Quotes

To learn more about the different types of life insurance and get information from insurance companies about coverage, policies, and rates, enter your zip code to begin a life insurance quote. Free, instant life insurance quotes online provide potential policyholders the ability to compare life insurance rates, coverage options, insurance companies, terms and conditions to find the best and cheapest policies. Life insurance quotes are fast, free, and convenient, don’t require you to deal with sales representatives and give you the option to choose from a multiple different life insurance companies. If you don’t research and comparison shop before buying life insurance, how will you know if you are getting the best coverage at the lowest rates?

Enter your zip code, choose an insurance company, and get a free life insurance quote to see how affordable term or whole life insurance can be for your family.

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