Ask YOUNG MONEY: What type of life insurance is best for me?
A: The basic difference between the two types of insurance are that term life is pure insurance. You pay a premium for a certain amount of coverage and if you die your beneficiary receives a lump sum amount. Cash value insurance includes an investment along with the insurance coverage. Part of your premium is invested for you by the insurance company. As that investment builds up what is called a "cash value," you can actually borrow the money from your policy or use it as collateral for loans.
Most single people do not have a need for life insurance. Adults who have dependents, people who count on them to earn a living and pay the bills, are the ones who need to have life insurance in place in case they were to die.
You might be better served with disability insurance at this point. Disability insurance replaces a percentage of your income if you were to become injured or sick to the point where you could not work and earn income to pay your bills.
Mike Schiano
My call-in radio show, "Mike about Money," airs every Saturday 1-3pm EST on TalkStar Radio Network and online at ww.inchargeradio.com.
Call Mike about Money every Saturday at 1-877-528-TALK (8255)
Listen to a Money Minute with Mike at: http://www.inchargeradio.com/MoneyMinutes/default.aspx
Improve your Credit Score with "Credit Booster: Ultimate Guide to a Better Credit Score from InCharge Education at www.inchargeradio.com and save 40% on CreditBooster.
Comments
It depends on your circumstances and needs. You should consider the following: 1. Are your life insurance needs temporary or permanent? 2. Considering your budget, is the premium affordable? Depending on your needs and budget, you may want to consider a combination of some term insurance and some whole life insurance.
There is absolutly no benefit whatsoever to buying cash value life insurance! period. Please anyone that tells you different only thinks this way because he or she has been hosed and doesnt know the difference or they sell the garbage. This is a great idea and it makes it really easy. Tell the cash value agent trying to sell you this garbage that you want another term life agent that only sales term to come over and they can both talkto you together and show you which one better suits you. 99.9% of the time the cash value will give you some crazy excuse on why that is not possible and why he/she is busy everytime you set something up. Just do the research cash value is a scam! my grandpa died 11 months ago and my grandma is still waiting for her check. she is now probably going to have to settle out of court because the lawyer fees are getting rediculous. Please do your research and I promise if you are at all smart you will buy a term policy!
Money Saving Tools
