There has been an age old battle between the virtues of term life insurance verses whole life insurance. The proponents of term life insurance often lead with the argument that it would be better to buy term insurance and invest the difference. The whole life advocates attack the temporary nature of term insurance and are skeptical about people investing properly to achieve what the whole life product does on its own. The insurance industry has come up with several variations of life insurance to appease these two opposing schools of thought. The Universal life policy was created in the 1980’s. It is a flexible premium policy that gives the insured the option of changing premiums and adjusting the performance as well as the policy period. Variable Life policies have investment features called sub-accounts. These products were developed to counter the term verses whole life dilemma. The complexity of the new plan kind of stymied the average consumer. Life Insurance professional have a much greater role in sorting things out for the permanent insurance shopper.
The term verses whole life battle has kind of resulted in the marriage of several concepts. The best way to approach this is by taking a more simplistic approach. Term insurance is for temporary needs. Whole life insurance is for permanent lifetime needs. It seems to me that we need both types in our insurance portfolios. A permanent base of whole life, universal life or variable life with additional term policies or riders seems to be the balanced approach. If you are opposed to permanent forms of life insurance, you need to have a defined strategic investment plan to provide for you during your retirement years. The average consumer does not have the time to become knowledgeable in making investments. Choose an insurance company and or professional that can translate your financial goals into a meaningful insurance and investment portfolio. That will probably include both whole life and term life insurance.
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Greg Haehl