Kamis, 31 Maret 2011

Whole life insurance

Whole life insurance is a great investment--for the insurance agent who wants to sell it to you. If he can get you to believe that it would be a good investment for you, he will be a richer man by far. For you, trusting

life insurance as something that can help you out when you retire, or to borrow against now, is a bad idea according to many financial experts. Life insurance provides for your burial and financial needs for your loved ones, if you die, but is not a good investment.

Suze Orman, Dave Ramsey, and many other financial experts are against whole life insurance period. Many would support term life insurance instead. They are especially against it as an investment.
What exactly is whole life insurance? What is term insurance? Why are some financial experts so against whole life insurance period and especially against it as an investment?

Whole life insurance, which is also called permanent insurance and universal insurance, is insurance that will cover you for the rest of your life. Term insurance will cover you for a particular number of years--such as 5 to 30. The premiums with term insurance usually will remain the same for the term of the insurance. If you want insurance after that period of time, however, you can expect your rates to go up. With whole life insurance a portion of your premium will go toward the insurance cost of the death benefit. Another portion will go toward the savings in your policy. That money will accumulate and increase over time.

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