• 29
  Jan
  2010

• The Whole/Term Life Insurance Ratio: Mix the Right Cocktail

  
  Filed Under:
  0 comments, add yours

When do you really need term life insurance, and when do you need whole life insurance? The answer really depends on the financial status of your family and your financial principles. Remember that there is also an option of having whole life insurance with a term rider, which combines the benefits of both.

Life insurance, in general, is meant to safeguard against the financial burden of a person’s death on his family. Yes, it was originally designed only for men, whose death would leave a woman without any sustainable means of income. Similar principles apply even now, although whole life insurance has also become a way to invest money.

If you are relatively young with a working spouse, and do not have kids, term life insurance is likely the best option. This is especially suited for those who have bought a new home, as term life insurance will be very handy in paying off the mortgage in case of an untimely death.

As you grow older, the mix should probably move from 100% term life insurance to a mix of whole life and term life insurance, to 100% whole life insurance. Once debts and mortgages are taken care of, it is best to utilize whole life insurance more. However, this is merely a guideline, and each person’s needs may be different. Make an informed choice to get the best coverage possible for your peace of mind and your family’s.