term life insurance is in effect so long as you pay for it and pays out the face value of the policy at time of death. Whole life is an investment policy. Your premiums earn interest which can be paid back to you, added to the value of the policy or be used to pay the premiums, eventually making the policy self-perpetuating. The face value and any accrued interest is paid out at death, or the policy can be used as a retirement portfolio.
Archive for the ‘term life insurance’ Category
What Is The Difference Between Term Life Insurance And Whole Life Insurance?
Monday, March 1st, 2010Is Term Life Insurance The Best Value For The Money?
Sunday, February 28th, 2010Generally, Yes.
Whole life is essentially a combination of Life Insurance and an Investment plan in one package. The rates of return ( due to higher costs) are usually lower than a similar investment without the insurance. So you could very likely get separate term insurance and a separate investment and do better.
One exception is the case where you do not meet the health requirements for the best term policies. The underwriting guidelines may be looser for the whole life policies. Some companies may also offer a plan where you start at one rating and are automatically upgrated to a better rate after some period of time (i.e. 2 years)