Whole Life Insurance: Coverage types and benefits

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Posted: Fri Apr 17, 2009 10:03 am Post subject:

Hi Expert,

Quote:

She'll only only care about the amount.

That's perfectly true. But what if there are 2 policies with the same cost but different returns for over a particular period of time!
It is there that the challenge of investment lies.

Steven

steven
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steven

Joined: 02 Feb 2006
Posts: 1553

215.65 Dollars($)

Posted: Fri Apr 17, 2009 11:51 am Post subject:

There aren't 2 policies. There are hundreds of policies. There are also plenty of things that someone can do other than insurance. We simply can't know what is best in advance. That's why I say that the best kind of insurance is that which is in force at death. Are you going to die this year? Buy annually renewable term insurance. Within the next 20 years? Buy 20 year term. Within the next 30 years? Buy 30 year term. At age 120? Don't buy life insurance. What are you saying? You don't know when you'll die? You think that you'll probably die when you are old, but you might die before then. This is the case for all of us. We need to figure out how much money we would like for our family to have now. Because of budgetary constaints, in many cases, this will all have to be term insurance. In many cases, this will be a combination of term insurance and permanent insurance. In a few cases, this will all be permanent insurance. So, if the need is $1,000,000, and you buy $1,000,000 of coverage, regardless of what type of coverage you get, if you die prematurely, she'll get about the same amount of money. People have limited dollars. If all of the coverage is term coverage and death occurs "late", insurance won't be in force at death. If all of the coverage is permanent and death occurs early, the death benefit may be too small. 1)Worry about amount of coverage 2)Worry about type of coverage 3)Ignore #2 until #1 is handled