Combining whole life and term insurance! Have you ever given that some
The life insurance company can create a combination policy for you if that is your desire.
This idea works out pretty well for some people.
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Why would you combine whole life and term insurance anyway? If you use your whole life policy as a base and add the term policy you would end up with more life insurance death benefit for your dollar than had you bought whole life alone.
On the other hand you may say that if you bought term alone
you would get more death benefit.
That is true but ask yourself this question, suppose you don't die within the term period would there be any money to get back. The answer is usually no, unless you buy a "return of premium term policy".
The way to set up these combination plans, whole life and term,
requires some planning. If you qualify for a preferred risk policy with a
top level company you may only need to buy about 25% or 30% whole life
and the other 70% or 75% term insurance.
This combination will afford you a fairly decent amount of total life insurance with some cash values to assist you in the hard times.
The type of term policy you purchase would depend on your particular need, 5 or 10 year level term for short term needs and 15, 20, 25, or 30 year term policies for longer term needs.
The reason you would use a combination policy, whole and
term life, is that the portion of your premium that pays for whole life
accumulates cash values.
If you are unable to pay your premiums at some point in the future you can draw upon the cash value and the dividends, if any.
You can use those funds to keep the policy in force. Keep in mind, however, that it takes time to accumulate worthwhile cash values plus dividends.
It is important to also remember that, depending on the portion of premium assigned to each type of policy, your cash value may never equal your total outlay. You will have some cash for emergencies though, after a few years.
Actuaries have used similar ideas and created actual policies. If you examine the universal life policy you will find that it is a term policy combined with a saving plan.
The variable universal life insurance policy is term insurance combined with an investment and the variable life policy is whole life insurance combined with an investment portfolio.
Ask yourself what type of insurance you need and why. Combining different types of life insurance policies may work for you.
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Term life insurance is life insurance in it's simplest form. These policies stay in force for a specific number of years, for example, 5 years 10 years etc.
Whole life insurance is the plan of choice for many people. There are many variations to this plan.
Universal life insurance was designed with the express intention of combatting the venerable whole life insurance policy.
Are you looking for quality term insurance quotes? Have you determined how much you need? Do you know what type of term insurance is best for you?
In many cases it is a good idea to buy term insurance online. Some people know just how much life insurance they want to buy before they get online.