Reasons to look into term life insurance
May 14, 2012
In regards to financial planning and getting older, life insurance could be critical for planning. While many people don't want to deal with the hassle, it could be a very important life decision for a policyholder or their family to update or buy new life insurance. Fox Business said there are some situations for which term life insurance should be looked at over whole life insurance, as not everyone needs the investments that come with whole life.
"You should reevaluate your policy every few years to make sure it still fits your lifestyle," the news source said. "For instance, a spousal death or divorce changes the need for protection, and grown children may lessen the need for insurance coverage."
Situations in which people look at a term life insurance over a whole life insurance policy can include if the policyholder only wants a death benefit from their plan. The policy will pay the face amount to a beneficiary, with periods from one to 30 years, according to the news source. On the other end, cash value whole life insurance will build up slowly and may not give a big return until a certain period of time. John Thornton, executive vice president of Amalgamated Life, said it's better to have adequate coverage through a term policy than not enough in a whole life insurance policy. Another reason to look at a term life insurance plan is they're generally less expensive than whole life.
SmartMoney agrees with Fox Business' assertion that term life insurance is better in many situations than whole life.