The whole truth

Personal Finance: Alternative to term life insurance has some definite drawbacks | David Bahnsen

I am frequently asked what I think about whole life insurance. The widespread and highly successful distribution of this product has certainly increased the conversation surrounding it, but a few criteria are key to determining what makes the most sense for you.

To simplify the subject, "term life insurance" is essentially "pure" insurance in that you are paying a very low premium for a high death benefit, and once the "term" ends, so does your coverage. In the case of term insurance, the insured does not want the policy to pay, because it will mean that the insured is deceased. A variety of terms exist, but most commonly people will buy a 10-year or 20-year term. This is generally very affordable insurance, and it allows families to provide for necessities in the event of the breadwinner's premature death.