The Benefits of Whole vs Term Life Insurance

Mortgage Protection Life Insurance is a Term Life Insurance policy that that has special riders that provide for your mortgage payment to be protected if you become disabled or unemployed. Life Insurance, in particular whole or permanent life is the best investment available for the average individual that would like to leave a legacy to their heirs. In the U.S. Life insurance does not go through probate, is not taxed and your heirs have access to their “inheritance” within a few weeks not months or years. In addition whole life builds a cash value that you can access in emergencies or use it like a retirement plan where you withdraw a set amount monthly or annually just like a pension if you start your policy at a young enough age or infuse it with extra cash being careful not to exceed the 7 pay limit. The illustration that you get when purchasing your policy should indicate what that amount is. If it does not – ask for it! The great thing about whole life is your premium payment never goes up no matter how old you get. While it costs more then Term Life initially over time Term insurance premiums become cost prohibitive and you have nothing to show for them. While whole life premiums stay the same for life. Hence the term “whole life”.

Term Insurance is pure profit to the carrier as the majority of term policies are never paid out. Most are cancelled due to the increasing premium costs long before the policy owner dies. Term Life has it’s uses for protecting your home, short term debt obligations to save you family from financial ruin. However, unless you die young it not very cost effective in the long term.

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