Why does one generally buy a life insurance policy? The answer should have been simple – to make sure that his family can lead a decent life even if he dies before he has been able to make adequate arrangement for them. Unfortunately, that is not always true. Many people buy them for capital building also. Indeed, some whole life policies have actually been conceived with such intent. It is true that they also provide insurance benefit in case the insured event takes place, but to the policyholders, that is only the secondary. Therefore, before we talk about whole life vs term insurance, we should first decide why we want to buy such a policy. 

By whole life, we mean all those policies, which are valid for the whole life of the insured. In general, there are three types of it - whole life insurance, universal life and variable life. All such policies are rather expensive, but on the pro side, 

• The death benefit is offered whenever the policy holder dies.
• If you find that you don’t need the coverage can more, immediately you can cash them out easily. 
• You can avail the loan against the accumulated value very easily.
• You can also use them as collateral against loan

On the contrary, if you want a wide coverage at a very reasonable rate, you must turn to low cost term life insurance for that. Agreed, such policies are valid for a stipulated period only, but nobody needs coverage for his full life. Indeed, thirty years is long enough time to settle all your liabilities and have some extra cash for self-insurance. In fact, the best advantage of term life is that you can buy the coverage for as long as you need it and pay only for that period. 

Another oft-repeated complaint against term life is that they do not provide any return unless the insured dies within the valid term. Well, that is what an insurance policy is all about. They pay the benefit only if the insured event takes place while the policy is still running. For example, you will not expect an auto insurance to pay anything unless the insured vehicle meets with an accident or is stolen. Then why do you expect a life insurance policy to provide returns even when the insured event does not take place? 

If your aim is to get coverage at a reasonable rate, start searching for term life insurance quotes. You have ti remember that all other policies except the term life are rather overpriced. Under the whole life policies, the amount you pay above the cost of insurance is deposited in a separate account and is invested in different funds to build up the capital for you. However, in a low cost term life insurance, the entire amount you pay as a premium is utilized to grow the insurance account. Therefore you can get larger coverage at a lower rate. 

It is a fact that the whole life policies are more profitable for the insurers than for the insured. It is true that if you outlive the need for insurance, you can surrender a whole life policy to receive the accumulated cash value. However, in doing so, the carriers are not doing you any favor; they are returning you own money. Moreover, they will retain the face value developed separately from it as part of their profit. Contrarily if you die, the insurer will retain this cash value and only the face value will be released as death benefit. Therefore, in either case, the carriers have their profit assured. 

Actually, for all those policies that accrue cash value and provide return even when the insured event has not taken place, you need to pay extra. It is wise to buy a term life for insurance purpose and invest the difference separately for capital building purpose. In case if you die your family will receive both the insurance amount and the investment you had made separately. 

However, making such investment is possible as long as the policy is a fully underwritten low cost term life insurance policy. The no medical life insurance policies in spite of being term life are rather expensive and so you will not have much ‘difference’ to make any separate investment. However, if you want immediate coverage, you may not have any other option but to go for it. Indeed, opting for these no medical policies is the quickest and most hassle free way of getting the coverage. It is however, upto you to see if it is worth the extra cost you will need to bear for the entire tenure of the policy. You see, there is indeed a lot to decide. 

Article by David Livingston of EQuote, who is a specialist in everything life insurance. For more information on life insurance term life and cheap life insurance, visit his site today.