If you have a spouse and children that depend on you, you need to get insurance. There is no question about it. Since they have to get it anyway, many people choose to get investment life insurance so that down the road their insurance gives back to them.
This type of insurance is also commonly referred to as whole life insurance. There are pros and cons to investment life insurance, and you should look into all of them and decide whether this is the right route for you.
One of the best things about whole life insurance is that for some people it is an effective way to set aside some money for retirement. Whole life also protects you through your entire life instead of expiring at a certain time.
The problem with this is that your premiums with this type of insurance are going to be considerably higher than with term life insurance. You are not only paying toward the death benefit that insurance provides; you are also paying extra for the savings account.
A common argument against investment insurance is that instead of paying the high monthly bill for this insurance, it makes more sense to shop for the best premium. The best premium is most likely going to come with term life insurance. Then you can take the extra money that you would have been paying for whole life and invest it somewhere else.
Also, term life insurance may be a great way to get a better deal down the road if at some point you no longer need as much coverage. But on the other hand some people don't like the idea of losing their coverage. They fear that getting another policy will be exorbitantly expensive. Some term life policies can be renewed, but this is something you need to plan for ahead of time.
Whole life insurance will continue to cover you no matter what health problems you may develop as you age. The peace of mind this provides for some people is priceless, and so they opt for this kind of policy.
Another thing to think about is the taxes that will accompany your investment. Since the taxes on investment insurance are deferred, you don't have to pay them now, but you should take into account when you will have to pay them. For some tax brackets there really isn't much point to the savings account because almost all of it will have to be paid as taxes. To keep yourself from massive disappointment down the road, be sure to check into this. On the other hand, some higher tax brackets can benefit from this money being set aside over the years with taxes deferred
No two people are alike, and everyone has different needs. Only you can weigh the differences between term and investment life insurance and decide which is best for you. Just be sure to do some shopping so that you know you have made the best decision in the end.
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