There are mainly two kinds of life insurances: one that rips you off, and one that insures you when you really need it. The former includes all types and variations of life insurance with cash value. The latter one is the plain and simple, term life insurance.
Why? There are just too many credible experts that comment on the cons of cash value whole life insurance, while only institutions that affiliate with the industry and insurance agents praise the pros. In other words, there is a lot of blowing one’s own horns and whistle blowing at the same time. The conclusion is that term insurance makes more sense for the majority of people. I will elaborate.
In life insurance, there are several factors that contribute to the cost. First is mortality rate;, the more people die in the earlier stage of coverage, the more expensive it would be for insurers to insure their life. If you belong to a class of people that is high risk, due to reasons such as smoking, the overall cost for your policy will be much more expensive than a policy for people who don’t smoke. Life insurance for women is cheaper than men, if all other factors being the same, because women generally live longer than men.
Here is the catch, if you want the insurance company to insure you for your whole life, it will get much more expensive than only insuring you when you are able and healthy. Since they expect you to die during the coverage, they increase your cost by at least 4 to 10 times! Term insurance, however, only covers you when you need your income the most, and are much less likely to die unless it’s an untimely death that warrants the need for coverage in the first place.
Finally, the most confusing and costly feature of all, the cash value feature. It gives the insurance company a lot of leeway to keep your money in the dark, and finally keep it to themselves.
In one of my articles, I have outlined all the pitfalls of cash value life insurance, and mental detours that insurance salesman imposed on customers. There were also numerous cases where customers found out the problems of some of the newer versions of cash value life insurances, such as the Variable life insurance, only when their policies got very expensive and they couldn’t afford the cost anymore. You can find the link to that article in the below.
Want to find out more about how to save hundred of dollars on your life insurance?, then visit my other page on how to choose the best life insurance that put your money back to your hands.
Tags: buy term life insurance, cash value life insurance, life insurance, term life insurance, whole life insurance