Whole vs Term

Life insurance needs will change but it is best to keep life insurance policy instead of dropping the coverage when you grow older. When an individual ages, a permanent policy becomes an increasingly important asset, because a person’s insurability tends to decrease over time. A term policy provides temporary coverage, but relying on term insurance to help offset other expenses can be a risky move. Why? If the term policy expires, the individual loses the ability to utilize the tax efficiencies of life insurance that increase with age and over time. Following are some other important reasons why you should have whole life insurance policy.

1. It helps to counter inflation and its effects on other assets that are used to supplement retirement income by providing stable cash value accumulation.
2. The tax-deferred treatment of life insurance versus the taxes generated by other kinds of assets (CD, Mutual Funds, Savings Accounts).
3. A valuable financial tool when illness or disability strikes (if the appropriate riders are attached).
4. It provides a legacy to your children/grand children or charity, and offset estate taxes.
5. Greater financial protection in the event that Social Security benefits are reduced.

Please let me know your thoughts and comments.