Whole Life vs Term Insurance? Are there differences that we should be made aware of?



Yes, there are major differences in WHOLE LIFE VS TERM insurance and it is important that you know because you may end up purchasing (or being SOLD) a policy not knowing what you are really purchasing!

Vicki Gunvalson: A Life Insurance Agent's Take On Whole Life vs Term Insurance

"The difference of term to permanent. I think that term is being sold to a lot of clients under age 40 where I try to talk more permanent coverages when over age 40 with more on the estate planning side where it is something they want to have for their beneficiary's benefit when they are an age 100.

So with term we could obviously only go 20 to 30 years but when we're looking at 40-50 year olds I always talk to them about permanent coverage."

Whole Life vs Term: Be careful of a Life Insurance Agent like Vicki Gunvalson!

We believe that no one should purchase anything other than term life insurance

When you have an agent trying to sell you Whole Life Insurance, Universal Life Insurance, Variable Life Insurance or Survivorship Life Insurance then be extra cautious with this life insurance agent because they may be looking at their own interest and financial gain rather than you and your loved one.

Whole Life vs Term Insurance: Breaking Down Whole Life Insurance

Permanent Life Insurance which includes Whole Life Insurance, Universal Life Insurance, Variable Life Insurance and Survivorship Life Insurance has a built in "Cash Value" but when you understand that the cash value really means nothing to your bottom line you will never think about purchasing any of the types of permanent life insurance.

Cash Value is the "investment" portion of life insurance that you can access through loans or withdrawals. The death benefit may be reduced with the withdrawals and there may be some charges which could affect your policy in the future.

Life Insurance agents that tell you the benefits of cash value either don't know how bad a permanent life insurance policy is for you or they don't but chances are they know how much commission they stand to make from selling one of these whole life policies to you and have chose that route instead of looking in you and your family's best interest.

Whole Life vs Term Insurance: What? Do you mean I get to invest with a life insurance policy? Isn't that wonderful?

Yes, there is an investment portion to these permanent life policies but in reality the cash value is never really yours. It's the insurance company's money and they will allow you to borrow from it. They will tell you that you can borrow from it to pay for your children's college expenses, medical expenses, emergencies or for retirement. But you must pay the funds back with interest.

Whole Life vs Term Insurance: Borrow From Your Cash Value? Isn't The Cash Value My Money?

Sorry to tell you but it is not. Until you cancel the policy you are paying an enormous premium into an investment + life insurance that you don't have control over. It's really the insurance company's money.

Also, the investments that they offer you are very limited and they make additional commissions off of the investments that you choose because those investments wheter mutual funds or money market funds are held until the life insurance company you purchase your policy from. You have a limited number of investment choices and they may not be the best funds to choose from either.

If the life insurance agent, after trying to push whole life / permanent life insurance onto you then switches to term life insurance and tries to sell you that type of life insurance just leave the office. Don't deal with them any longer.

Term Insurance and Term Insurance Premiums

Term Life Insurance is pure insurance without the investment portion. The amount of money that you save purchasing a low cost term life insurance policy is huge compared to buying a whole life policy. NOW take those savings and put it into any investment (mutual funds, stocks, bonds, money market) of your choosing.

YOU CHOOSE what investment you want for yourself OUTSIDE of the life insurance company. KEEP YOUR INVESTMENT AS FAR AS YOU CAN AWAY FROM YOUR LIFE INSURANCE COMPANY.

You control it. You manage it and make withdrawals whenever you please without "borrowing" from it as you would from a Whole Life Policy / Permanent Life Insurance policy.

So forget Cash Value! It's a shallow way for the life insurance company to try to get you to give them a larger amount of commission. Have FULL CONTROL of your money when you separate your life insurance and your investments.

Whole Life VS Term Life Insurance

Other phrases they may try to use:

Whole Term Life Insurance
Whole Term Insurance
Permanent Term Life Insurance
Term Life Insurance Cash Value
Variable Term Life Insurance
We fully support Suze Orman's stance on Life Insurance. She will tell it like it is when looking at:

Term Insurance vs Whole Life Insurance
Term Vs Permanent Life Insurance
Whole Life and Term Life Insurance
Term Life Insurance Versus Whole Life Insurance
Term Life Versus Whole Life Insurance
Universal Life Vs Term
Term Versus Whole Life Insurance

Remember the differences when it comes to Whole Life vs Term Insurance because if you are not paying attention you could be throwing money away for a lifetime.