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i'll be 65 in 4 weeks term vs whole, which is bset for me?

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1 Answer

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To make a long story short: it depends.

If you are looking for an opportunity to create an estate, then insurance is one of the smartest things you can do. However, term insurance is cheaper than whole insurance almost every single time. In addition, because you are getting up in years (basically anything older than 40 in the insurance field) you are going to see your rates skyrocket. This is just due to mortality tables and the information that the actuaries calculate.

Basically, it comes down to what you need the insurance for. If it is to cover something temporarily (such as a home mortgage for the next 10 years until you finish paying it off), then you only need term for a short period of time; ten years. If you pass away after those ten years are up then you don't get anything, but you also know you are not paying an arm and a leg for insurance.

When it comes to whole life insurance, you can absolutely create an "estate," because you will be guaranteeing your payout for life (it gets a bit more complicated based on the specifics of the company and the type of whole life insurance you choose). However, there are a few factors to consider. Because whole life insurance doesn't expire (term insurance expires after the term is up), then you will be paying much more for it per month in premiums. In addition, you also have to consider a benefit to whole life is when you start earlier in life you are able to create an estate for a long time. For example, if you start paying whole life premiums at 20 and don't pass away until 100, that is 80 years of coverage as compared to needing to buy 80 years worth of term insurance.

Long story short: it depends. However, unless you have a need for whole life, it probably is just going to cost you more and won't be as valuable at this stage of your life.
answered Apr 13, 2018 by larson82 (1,470)
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