Whole Life Compared To Term Insurance
Whole life insurance comparison. One of the ongoing controversies in the life insurance business is the constant comparison of whole life insurance with term life insurance.
There is an unbelievable hatred by the term insurance lovers of whole life insurance in any form.
If these people took the time to understand the differences between the companies that sell whole life insurance and to make an honest whole life insurance comparison between the policies sold by these companies they would come to the realization that all whole life insurance policies are not the same.
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Whole Life Insurance Comparison
There can be a vast difference between the performances of life insurance companies and thus a noticeable difference in amount of premium, cash value and dividend. Why is it that two companies, both 150 years old, have such vast differences in net worth? Check A.M. Best and you will see the disparity.
Although an insurance agent’s license is threatened by suggesting that whole life is an investment vehicle or even a good saving the amount of return on some of these policies, with some of the better companies, certainly makes the whole life policy look pretty good.
If we were to make a whole life insurance comparison paying special attention to the yield derived from savings in the average bank over a 20 year period on a specific amount of money saved on a regular basis it would be too shameful to mention.
We are not talking about projections here but actual past performance. Yet some of the better life insurance companies even though they have very little cash values in the early years show a much better return if you were to subtract the cost of term life insurance at it’s cheapest rate over that same 20 year period.
It is my sincerest opinion that the reason for the strong armed tactics in the life insurance industry against projecting whole life as saving is that the companies that do not perform were projecting illegal and unrealistic numbers to their potential clients just to compete with the true and honest performers.
The SEC as well as the Commissioners had to clamp down on that for the protection of the consumer.
Life insurance is not savings and dividends are not guaranteed but do some research on the better life insurance companies, do an in depth whole life insurance comparison between policies and companies and see what you come up with. You may be pleasantly surprised.
It would be foolhardy to attempt to compare a whole life insurance policy with a well managed investment portfolio but some mutual fund portfolios are so badly managed that I shudder when I think of the poor people who are depending on the cash from these investments to use for retirement income.
I could go into details on other retirement investments but I won’t at this time. All I ask is that you bear in mind that every time you roll over an Annuity, IRA or 401(k) there are certain costs involved. Think of who is making the money. I assure you that you aren’t.
Don’t think of whole life insurance as an investment but just remember that if you do your research and find a good company from which to buy your policy there is more to gain than meets the eye. Do a thorough whole life insurance comparison before you make a decision.
This article may suggest to some that I do not like term life insurance. That assumption would be entirely incorrect.
Term insurance would fit into more peoples portfolio than would whole life because it is more affordable. Term insurance is good insurance if your interest is providing for your family after death. Whole life also has it’s place.
It can do what term insurance can do and considerably more. If you are able to afford it and you like the idea of cash value and dividends take a look at a whole life insurance comparison.
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