Dec. 22, 2007

Do You Need Life Insurance - Whole or Term?

life-insurance.jpgIf you are like most people, you talk about all the things you need to do like get life insurance to protect your loved ones in case of a tragedy, but with a busy life style it is easy to procrastinate. (After all, there is always tomorrow, right?)

The truth of the matter is that you DO need life insurance, and tomorrow may not be soon enough if something horrible happens to you and your loved ones are left without a security blanket (to pay off your real estate investments, mortgage and other liabilities). There are two main types of life insurance, whole life and term life. The less expensive of the two is term life insurance.

Term life insurance is meant to provide insurance for a specified period of time, for example, during the time when the children are still dependent on you. Term life insurance generally the least expensive form of life insurance, term life insurance covers an individual for a nominated period of time (term). If the person insured dies while covered, the designated beneficiaries will collect a death benefit. There are no other associated benefits.

Whole life insurance, or Whole of Life Assurance, refers to a policy that pays a lump sum on death or, in some cases, the earlier diagnosis of a critical illness whenever it occurs provided the contract is kept in force through the required payments being made. Life insurance that remains in force during the insured's entire lifetime, provided premiums are paid as specified in the policy. Whole life insurance also builds a savings elements: called the cash value as a result of the level premium approach to funding the death benefit.

You will have to talk to a financial advisor to see what life insurance policy will be best for yourself and your family. You can also check out Google News for the latest information about what is happening in the insurance industry.

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