For the amount of death benefit one can purchase Whole Life, as life insurance is way overpriced.

• $500,000 worth of Whole Life Coverage = $14,000 per year
• $500,000 worth of Term Coverage = $300 per year

Difference of $13,700 extra you are paying to get Permanent Life coverage.

What is the difference between Term Life Insurance vs Whole Life Insurance?

Term Insurance is for a set term or time period from 1 year and usually up to 30 years.

Whole Life is life coverage for the rest of your life PLUS an “investment portion” held by the life insurance company.

With Term Coverage there is no investment portion. Like car insurance it is pure insurance. That’s it.

Do you ever see an auto insurance agent try to add an “investment” to your automobile coverage? No you do not. It doesn’t make sense at all. What for? It is the same thing with life insurance. What for?

With Whole life coverage it is Term insurance + Investment Portion with you paying premiums for the rest of your life.

1st thing’s first. What do you need life coverage for?

You need it to protect your family that depends on the breadwinner’s income whether it be the husband working, the wife working or both parents working to bring money in to take care of the family. Life Coverage is there so that if something happens to the income provider the income can still come in and the family isn’t financially devastated.

Once the children are grown up and making their own income they are no longer dependent on the parent(s) income. At that time you no longer need it for that purpose.

So why keep paying premiums for the rest of your life?

Some people believe that it will make their family rich but that is further from the truth. Don’t throw away your money like that. You are better off buying term coverage only for the time period for which it is needed.

Besides, the older you get, the premiums are going to skyrocket. You only purchase it when you need to protect your family.

Save your money and/or invest it wisely.

But what about the investment portion when you buy whole life insurance?

It is sold to you as an investment for retirement / children college fund / emergency fund in which it will grow while being held by the company and you can “BORROW” from it and pay it back with interest.

BORROW from my investment? Isn’t it my money?

No, as long as your policy is active you can only borrow from it AND pay the life company back with interest. They call it CASH VALUE. Sounds like a catchy and wonderful phrase right?

The real ripoff? You first year of premium payments you get NO CASH VALUE. That’s right. The money that was supposed to go to your investment portion only starts the 2nd year. The first year it goes to the insurance agent commission and the insurance company. Your money? Yeah right. Their money.

BOTTOM LINE? Buy Term Coverage only when you need it (ONLY when you have dependents)

Take the money that you would save and put it into a retirement account which YOU CONTROL 100%. Your money fully controlled by you to invest it anywhere you choose or just leave it in cash.and STAY AWAY from Whole Life / Permanent / Universal Life / Variable Universal Insurance or any type of life insurance that has a savings or investment tied to it.