| Traditional Whole Life, is the original cash-value policy. The insurance
stays in force as long as you pay your premium, i.e., it is permanent. The
premium you pay is fixed and depends on your age when you buy the
insurance. The insurance company will invest your premiums and you can
borrow from the cash value built up if you so wish at a favorable rate of
interest. |
| To pick a life insurance policy that is best suited for you, you should
consider the advantages and disadvantages and relate them to your
particular situation. However, if you are the breadwinner of a young
family with limited resources (which is true of most young families), you
will most probably be better off with term life because you will be able to
afford a greater amount of death coverag e for the same amount of premium.
On the other hand, if for any reason you want coverage throughout your life
or for more than 20 years (e.g., because of health reasons or for estate
planning purposes), then a whole life policy may be your best bet. |
| In view of what we just experienced on naijanet from the passing away of
one of us and the subsequent discussion of life insurance, I am forwarding
this article to the net. I had written the article for the May 1996 issue
of the NACO (Nigerian Association in Colorado) Newsletter, and had posted
it on naijanet net about a year ago when a Nigerian passed away in
Baltimore and there was subsequent discussion of life insurance. The
articles addresses issues such as: |
| I would advise most people to dump cash value life insurance policies
and put the money in anything else -- even a passbook savings -- that
way all your money is working for you instead of buying a Lincoln Town
Car for your life insurance agent. |
| There are four varieties of term life: Annual Renewable Term (ART), Level
Term (LT), Modified Level Term (MLT), and Decreasing Term (DT). The
differences between them are in the way the premiums and death benefits are
structured. |
