Which is Better Term or Whole Life Insurance?
What is best, Term or Whole Life insurance? Let’s we compare which is better. In the age of 20 or 30, it is too common for young professional that their friends of colleagues push them to buy whole life insurance policy. According to one report, an average American changes 11 jobs in his whole life. In financial services industry, salesman have to sell their product, insurance policies, investments, brokerage services, etc. because their most of the income comes from commissions on sale. In staring of the job, they do not have contacts or market to sell their products so that they turned to friends and family members.
Difference between Whole Life and Term policy
Whole life insurance and term policy are two different types of policies. Whole life insurance builds cash value in the end. After payments of premium for many years, cash value provides many options. Depending on the type of policy, policy holder may get paid dividend also. Whole life insurance is not only insurance but an investment. This is the main reason of costliness of whole life insurance.
Term life insurance covers only period of the policy and remains as long as a person make the payments. When the term is over or a person stop paying premium, there is nothing like a policy. Many people do not buy this policy because they believe that it is poor investment.
Many Americans prefer to buy term policy because it has relatively low cost. Policy amount depends on expenses that will incurred in future and suppose to cover it. For many families, 20 or 30 year term life insurance is a better option and cheaper also. A whole life policy of $100,000 for 20 or 30 year person may cost about $150 per month. The same person can get term life insurance policy of $500,000 for 30 year’s period, by just paying $20 per month.
One another reason to buy policy, people often says, we don’t want to disappoint our friends. They say, “Most of our friends are trying hard live and to be succeed. We want them to succeed in their new professions.” Some believes that selling whole life insurance or life insurance is like a multilevel marketing pyramid scheme where the brokers and top executives are making money by pushing salesman to sell more.
Be honest and frank to say ‘NO’ if you really don’t want to buy. Kindly explain the reasons of not buying to salesman or friend who is selling whole life insurance.
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