[Nyokr]

I am beginning to consider life assurance, but am questioning which one is the choice that is best. I notice that period is not more expensive and I may locked in to 20, 10, 15 or 30 years. However whole life policy is being seen by me, and term's more pricey, and I notice that oneday if cash is needed by me, I may drawback some with that policy contract, of it. But I am only questioning... Thanks...

[Nyokr]

What's the distinction between whole life policy and term? When might it be safer to use one versus another?

[ebaines]

A term policy is just plain insurance - if you die the beneficiary receives the proceeds. In general term life insurance is the least expensive, simplest, and (in my opinion) the most appropriate type of insurance for most people.

Whole Life is a bit more complicated. A portion of your premium pays for life insurance, and a portion goes into an investment. Over time the value of the investment is expected to grow, so that years from now you may be able to redeem it. Sounds good, but you would be better off making these investments yourself, such as in an IRA or 401(k) account. In general I find that the investments associated with insurance policies are too often hard to understand, have high fees, and typically don't let you out without a penalty. Hence it's best that if you want insurance buy insurance (term), and if you want an investment account set up an investment account - don't mix the two.

The fees the insurance agent earns on selling a whole life policy are much greater than when selling term, so they tend to push whole life much harder. There is an old saying that people buy term insurance, and brokers sell whole life.