When it comes to Life Insurance, everyone who UNDERSTANDS life insurance knows that whole life insurance is the best; comparing whole life to term life insurance is OFFENSIVE.
If you want to know which life insurance is CHEAPER, Term life insurance or whole life insurance, well then Term Life wins that race in landslide, but I have bad news for you if you purchased term life insurance and you’re 63 years old and you’re not as RICH as Dave Ramsey or Primerica thinks you should be.
Around your mid-60s, that’s when you find out that you got what you paid for if you purchased term life insurance. Because as you age, it becomes more expensive, for LESS insurance.
For example, if you’re used to paying $35 per month for $250,000 worth of TERM life insurance, well, once you’re about 65 years old, it might cost you $70 for $100,000 worth of TERM life insurance.
Now, if you had purchased whole life insurance in your 20s, 30s, or even 40s, depending on your whole life insurance policy, by the time you’re reaching the age of retirement, you might actually OWN your insurance policy and have ZERO payments.
The best whole life insurance policies are dividend-paying whole life insurance, which has the option of paid-up additional insurance(PUA). Dave Ramsey is the ABSOLUTE WORST when it comes to explaining how PUA works, so do NOT listen to Dave Ramsey when it comes to PUAs.
PUAs are the best option for purchasing additional insurance so that when you reach the age of RETIREMENT, with a Whole Life Insurance policy, you have MORE insurance that you actually OWN.
So, I could purchase a whole life insurance that STARTS-off as a $30,000 policy for $100 per month when I’m in my 20s; well, if I purchase Paid-Up Additional Insurance, that $30,000 whole life insurance policy could easily become worth $200,000 by the time I’m 65 years old.
And that’s only if I spend $100 per month. If you scale that number higher, you’re talking about breaking $1,000,000 worth of insurance EASILY by the time of retirement, and the insurance company CAN NOT cancel your insurance.
This is the time I have to remind you that all insurance companies in Canada are backed by ASSURIS, so if you’re thinking to yourself what happens if the insurance company goes bankrupt, look up ASSURIS, they insure the insurance companies, if the insurance company goes bankrupt, which rarely happens in Canada.
Life Insurance is an important service in Canada because that’s how Orphans are cared for, so try not to think of life insurance as an OPTION in your life, it should be a priority. With that said, Term Life Insurance is usually NOT there when you need it the most.
Term life insurance is cheaper for a reason: it’s TEMPORARY, and most insurance companies ANTICIPATE that you will outlive the TERM of your insurance policy.
You can’t outlive your whole life insurance policy; that’s why it’s more expensive. In my personal opinion, you’d be better off purchasing a level UNIVERSAL Life Insurance policy than purchasing a term insurance policy.
Universal Life Insurance policies are basically PERMANENT Term life insurance policies; the difference between Universal Life Insurance and Whole Life Insurance is the monthly payments.
Whole Life Insurance is more expensive because the monthly payments NEVER change. Universal Life Insurance allows you the flexibility of paying lower amounts when you’re broke and higher amounts when you have more money.
Now, truth be told, I personally don’t want my life insurance to be complicated, so I prefer Whole Life, but at least with universal life insurance, the insurance company can only deny you coverage if you don’t pay your premiums.
The insurance company can deny you term coverage when the term insurance contract expires and the insurance company finds out that your chances of dying are higher.
Those of us with whole life insurance never have to worry about being canceled.