Term or Whole Life Insurance? Which Is Better?

Sun, Sep 16, 2007

Insurance

Today I am going to talk to you on insurance.

Yes…Just pure insurance…This is something important, something that you will definitely need to know.

There are basically 2 types of insurance
1) Term Insurance
2) Whole Life Insurance

Term insurance is a insurance coverage you enjoyed by paying small premium to the insurance company monthly or on a yearly basis.

It is usually a very small amount, about $10 per month or $100 a year.

There is no cashback value, meaning to say if you terminate the policy, it just means that you are no longer insured and there is no remaining cash value payable to you.

Whole life insurance is insurance coverage you enjoyed by paying a larger premium to the insurance company monthly.

It usually ranges from $100 per month or more.

For whole life insurance, there is cashback value, meaning to say if you terminate the policy, you are entitled to the cash you have indirectly save using this policy.

At age 60, you can convert to annuity anf the insurance company will give you additional 5% cash value. 

So the key here, which type of insurance coverage should one take?

Answer: It depends.

If one is seriously in a tight budget, I will recommend term insurance, because it is cheaper and can give high coverage.

At least, he is covered.

Better than nothing.

However, I will encourage this person to get a whole life policy once he is financially ready.

This is because in the event he terminates his term insurance or policy lapse due to non payment of premiums and he was to be downed with some diseases, and when he tried to reapply for insurance, the insurance company may no longer be able to accept him in that condition.

OR they may add loading (extra) charges which make the premiums rather expensive.

If one is leading a normal lifestyle, then my recommendation will be whole life insurance.

This is because, there are lots of people out there that stop paying term insurance premiums once recession or economic downturn occurs.

Unemployment, perpetual uncertainty and many other elements contribute to this.

If they have already get a whole life insurance, and in the event that they were to be retrenched, not able to continue to pay premium, no problem.

They will still enjoy insurance coverage running on the present cash value of their policy.

Insurance is something not to be compromised at.

It is a very important decision, important choice that you need to make.

At the end of the day,be it you choose term or life insurance,its definitely better than those who have none! 🙂

 

p.s. By the way, if you wish to discover a simple & halal way to create a positive monthly cashflow and calculate your net worth for FREE, then please click here…

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This post was written by:

- who has written 421 posts on The Official Helmi Hakim Website.

A certified financial consultant, Helmi Hakim has won praise for his patience, perseverance and practicality when solving his clients' financial concerns. For more information on how you can manage your finances better, contact Helmi Hakim at 96520134.

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One Response to “Term or Whole Life Insurance? Which Is Better?”

  1. serena Says:

    Wow, this is a blog with depth!

    Good information given on insurance and the 2 most basic types, of course there are others that can be customized and catered for your specific needs.

    In my opinion, life insurance is for a better choice.

    From my knowledge, it has wider coverage and yes the cashvalue.

    And! remember to start young with the insurance as the premiums are of a lower value as compared to only getting insurance at the age of 40, cause of the higher risk and prone to illness 🙂


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