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Spin off to life insurance
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CallaLily
Thank you, Saint Gerard!
Member since 10/07 4937 total posts
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Spin off to life insurance
What's the difference between term and whole life insurance? 
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Posted 4/4/10 9:34 PM  |
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mikeandjess
LIF Adult
Member since 10/07 2278 total posts
Name:
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Re: Spin off to life insurance
I googled this because after you asked the question I was curious myself what the difference was. I thought this was a pretty good explanation:
The basic difference between term and whole life insurance is this: A term policy is life coverage only. On the death of the insured it pays the face amount of the policy to the named beneficiary. You can buy term for periods of one year to 30 years. Whole life insurance, on the other hand, combines a term policy with an investment component. The investment could be in bonds and money-market instruments or stocks. The policy builds cash value that you can borrow against. The three most common types of whole life insurance are traditional whole life policies, universal and variable. With both whole life and term, you can lock in the same monthly payment over the life of the policy.
source:
link
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| Posted 4/4/10 9:58 PM |
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KLSbear
LIF Adult
Member since 1/06 1908 total posts
Name:
Karen
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Re: Spin off to life insurance
Posted by mikeandjess
I googled this because after you asked the question I was curious myself what the difference was. I thought this was a pretty good explanation:
The basic difference between term and whole life insurance is this: A term policy is life coverage only. On the death of the insured it pays the face amount of the policy to the named beneficiary. You can buy term for periods of one year to 30 years. Whole life insurance, on the other hand, combines a term policy with an investment component. The investment could be in bonds and money-market instruments or stocks. The policy builds cash value that you can borrow against. The three most common types of whole life insurance are traditional whole life policies, universal and variable. With both whole life and term, you can lock in the same monthly payment over the life of the policy.
source:
link
Term insurance expires at a certain age as well. Something like 98% of all term policies expire without every paying out. They are often purchased for short term debt (you want to back up a 30 year mortgage with a 30 year term policy to pay off a mortgage if one of the spouses should die) but are sometimes used as a cheaper solution to insurance in general. The drawback can be if you're intending to have it available for burial, spousal support, etc. and it expires at age 70 or 75 and cannot be renewed. Whole Life lasts your whole life. Universals and variables are speculative instruments tied to interest rates, stock market, etc. They can be really risky if you don't fully understand what you're doing with those.
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| Posted 4/4/10 11:10 PM |
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karabara
LIF Adult
Member since 8/07 1153 total posts
Name:
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Re: Spin off to life insurance
so funny, my dad and uncle were chatting about this during dinner tonight. i tuned out so i didn't learn anything!! till now, that is 
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| Posted 4/5/10 12:04 AM |
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