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When deciding how to plan your future finances, most financial counselors will advise that you buy at least some amount of life insurance-a sufficient amount to cover your family, particularly if your kids are younger and rely on your income for the immediate future.

The most confusing aspect of choosing the right life insurance plan is whether or not you should buy whole life insurance or term life insurance. Although you will find many insurance agents argue to the contrary, in most cases I would recommend that you not buy whole life insurance.

Here are two main reasons why I advise that most people stay away from whole life insurance:

1. It’s far more expensive than buying term life insurance

If you’ve ever taken the time to evaluate life insurance quotes, you have probably found a big difference in price between term and whole life insurance.

In a typical scenario, if you are paying say $20 per month for $250,000 in coverage in a term policy, a whole life policy with the same amount of coverage may cost you $300 per month or more.

As you already know, this is only part of the story. The reason term insurance is far cheaper is that it only pays you a benefit when the policy holder dies, as opposed to the whole life policy that gains value and becomes an asset which the policy holder can borrow against or even cash out. This brings me to the second reason why I advise against buying whole life insurance:

2. A whole life policy is typically a bad investment vehicle

If the $300 per month you were putting into a whole life policy were going to yield a good return on investment, it would almost be worthwhile. But the reality is that much of what you are putting in is eaten up in fees and it is often very difficult to determine what kind of return on investment it will bring.

Another bad thing about having a whole life insurance policy is that when it comes time that you need the money and want to cash it out, you no longer have the coverage on your family in case of your death-which was the main reason you bought the policy in the first place. This makes whole life insurance a really bad deal.

The majority of financial advisers who are not insurance agents agree that it is best to “buy term and invest the rest.” To say it another way, buy term life insurance to protect your loved ones in case of your death, and take the money you save from not purchasing whole life and put it into an IRA or another safe investment vehicle.

Doing it this way, you will be giving your family all the financial coverage they need at the lowest possible price, then you will have the flexibility and freedom to invest the money you save in the best possible investment vehicle to suit your needs.

Compare low cost term life insurance quotes today, and take the first step on the path toward securing your loved one’s financial future at www.lifeinsurancequotetoday

categories: term life insurance,life insurance,insurance,financial planning,financial,home

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