What is a Life Insurance Investment and Should You Get a Life Insurance Investment?
If you have a spouse and dependent children on you, you need to get insurance. No question about that. Because after all they have to get it, many people choose to get investment life insurance so that later on their insurance gives it back to them.
This type of insurance is also known as whole life insurance. There are pros and cons to investment life insurance, and you should look at them all and decide if this is the right route for you.
One of the best things about whole life insurance is that for some it is an effective way to set aside some money for retirement. Whole life also protects you throughout your life instead of ending at a certain time.
The problem with this is that your premiums with this type of insurance will be much higher than with term life insurance. You don't just pay the death benefit that insurance provides; You also pay extra for a savings account.
A common argument against investment insurance is that instead of paying high monthly bills for this insurance, it makes more sense to shop for the best premiums. The best premiums will most likely come with term life insurance. Then you can take the extra money you should be paying for your life and invest it elsewhere.
Also, term life insurance may be a great way to get a better deal later on if at some point you no longer need a lot of coverage. But on the other hand some people don't like the idea of losing their coverage. They are afraid that getting another policy will be very expensive. Some long-term life policies can be renewed, but this is something you need to plan ahead of time.
Whole life insurance will continue to protect you regardless of what health problems you may experience as you age. The peace of mind this affords some people so much that they choose this kind of policy.
Another thing to think about is the taxes that will accompany your investment. Since taxes on investment insurance are deferred, you don't have to pay them now, but you do have to factor in when you have to pay them. For some tax brackets there really isn't much use for a savings account because almost everything has to be paid as taxes. To keep yourself from major disappointments down the road, be sure to check this out. On the other hand, some of the higher tax brackets can benefit from this money set aside for years on a tax-deferred basis.
No two people are the same, and everyone has different needs. Only you can weigh the differences between term and investment life insurance and decide which is best for you. Be sure to shop around so you know you made the best decision in the end.