Which type of policy is best for you, term or whole life? The answer depends on several factors, including:
Your Needs. If you need coverage only until your children graduate from college, for example, you might be better off with a term life policy.
Cash-value assurance is better suited for long term needs, such as planning estate taxes and providing lifetime security for your spouse. Some term policies cannot be renewed past age 70 or 80 and can become costly to renew as you approach that age.
The Cost. If term life assurance is more suited to your budget and you want life time coverage, consider a term life policy which can be converted into a whole life policy. Then you can convert the policy whenever your cash flow or needs dictate. You can also purchase a combination of term life and whole life assurance and gradually shift into whole life assurance over time.
Your Savings and Investment Goals. Whole life assurance can be a good long term investment vehicle, especially because the cash value has the potential to grow tax-deferred. Should you no longer need the assurance but want some extra cash, you may surrender the policy and collect the accumulated cash value. Be sure to discuss the tax consequences with your tax advisor first.
As an alternative, you could purchase term life assurance and invest what you save on premiums on your own. Compare the returns you can expect, and remember to take taxes into consideration if you plan to select taxable investments.
So, Should I Buy Term Life or Whole Life assurance? Term life and whole life assurance both have advantages including immediate family protection. Deciding which type of policy and which features are right for you takes careful consideration and, most times, a comprehensible look at your financial plan. To discuss your life assurance needs and financial requirements, contact your financial professional.
About the author:
Hughes Trustco offers you free E-books & Brochures to help you in buying life and health assurance. For the cheapest and best life assurance quotes, visit http://www.hughestrustco.com