As you get older you need to look into your best options when it comes to protecting yourself. There are many options that can consider and two of the best options are whole life insurance and term life insurance policies. Now before I get into why term is the probably the best option for senior and other who are over 50,let me explain the difference between the two. You have to understand the difference between whole life and term life insurance before you decide to side with the term insurance. I mean there are benefits to both but when it comes to getting life insurance over 50, there is the more exceptional choice.
So what is the difference between the two? Well with whole life deal you get the life insurance as well as an investment contribution. And the investment can be in the form of bonds, money market cash value, or stocks. The three types of whole are as follows
Now the first thing you need to know is that with whole life you are paying the more expensive route. And that is mainly due to the fact that you are also getting an investment portfolio along with the insurance. Now when speaking about life insurance over 50 and above this may sound like a good idea, but it may not sound that good when you really look at what you are getting. Just like the term insurance you can buy into the plan for anywhere form one year to 30 years. And again this may sound like a good deal, but the investments are really not that great in the end. With the fixed or adjustable rates there are usually high and hidden commission fees attached to them. With the commission fees they are usually about 3 points from the yearly return. And with the upfront and hidden costs they take about 100% of your first year’s premium. Which is why, on paper it may sound like a good idea, but it really is not.
And that is why maybe making the choice of term insurance might just be the better investment. First, as stated above, term insurance is just insurance and nothing more. Plus you can buy into for those same one to thirty years.
The primary reasons that people buy into term insurance are the following.
1) estate planning
2) business planning
Most of the people that generally purchase this type of protection are those who are still working and in the event of a demise in the family, they want to have that protection.
If a man or woman is buying into the business protection there is normally three types of protection that he or she will look at.
1) Key Man Insurance–good for those who are working with a key person that their business could not survive without. So in the event of any sort of demise or loss, that key associate can take over the reigns
2)Buy-Sell Agreement–Something for nay key person to look at within a business. If at least one of the business partners suffers a demise or any kind of loss, than they can buy out the deceased partner’s contract.
3)Non-Qualified Deferred Compensation–Owners will set up cash value policies for themselves and their co-workers. And it is ERISA regulated. And this way the owner can determine who gets the benefits and who doesn’t.
Another great thing about having term insurance is that you can get into estate planning. Which basically means that you are lining up your assets in case of possible liquidation and possible future taxes. Putting aside all of the estate planning and taxes term insurance is very cheap when compared to other plans. And it’s best to get into them early on because as you get older these plans become more expensive. So by buying into term insurance at a younger age you will have that locked rate no matter how old you get. By going for the term insurance you will be guaranteed a safer way of building up your policy and you won’t be duped by hidden commission or gross and exaggerated fees.