Know The Difference Between Whole Life And Term Life Insurance

If you have decided that you want to invest in insurance you may be faced with a very difficult decision. Whole life insurance and term whole life insurance are two very different things that answer to many different aspects in your life as well as in your pocket. You want to make sure that you invest in the proper type of insurance as life and tern insurance can be more damaging than helpful if not chosen wisely.

Of course, before you can begin to even think about either of the two you need to first understand what the difference is, because this will help you figure out what is best for you and your family. It's also a great idea to turn to a professional to assist you with this important choice as a lot of money will be invested and you want to make sure that you and your family are covered well in case the unthinkable happens. Making sure that your family is secure long after you are gone and that they are left with money and not bills is of top importance and through whole life insurance or term whole life insurance this can be achieved.

Whole life insurance is insurance that lasts a lifetime. It doesn't have an ending term. This insurance is a better choice for a younger and healthier person as the life expectancy is much longer and it will be used longer. If you plan on paying the insurance for the next 20 years and are ready for such an investment and commitment, it's the best choice. Keep in mind however, that it comes at a high price, and you need to make sure that you really are ready for the commitment. In the case with whole life insurance you can actually cancel at any time, and a part of the invested money is returned to you. The premiums also stay the same over the years, so you don't have to worry about any increases. The premium is invested and grows over the years, then when either canceled or should the unthinkable happen happens, the agent takes the commission and your family gets the difference.

The difference with term life insurance is that it basically has an ending term, which is usually 10 years. It's less expensive and more appropriate for someone who doesn't expect to surpass those 10 years. It's a very good investment. One thing to keep in mind however is to know that if you choose to cancel your term life insurance you lose the money you have invested thus far.

The decision between term life insurance or whole life insurance is a very difficult one and you need to be fully educated before you make a commitment. If necessary consult with a professional to determine which is best suited for you.

Writing on Finance especially Life Insurance is like a passion for Iftikhar Tirmizi, check out for his latest articles on Whole Life Insurance

Mortgage Life Insurance or Life Insurance, What Is the Difference?

We have heard it many times. You were just approved for a mortgage, and the lender or your fiends tell you that you should get mortgage insurance. So you call an agent or do a search online. You ask the agent about mortgage insurance and the response often is, yes we do have it! And we offer great rates on mortgage insurance. And mortgage insurance is probably best for you. And....

The question is, is there such a thing as mortgage life insurance? The answer is simply no! Mortgage life insurance and life insurance are really the same. Look at it this way, if you buy a "mortgage Life Insurance" policy and you die, what happens? A death benefit is paid out. If you buy life insurance and you die, what happens? Same! The bottom line really comes down to your needs and the final price of the policy (notice that I did not say the quote for the plan). In other words, if someone quotes you $25/month for a "mortgage life insurance plan", and you can get a comparable life insurance plan for less, then take the life insurance.

Some people feel that mortgage insurance is better because it gets paid to the lender. First of all, regular life insurance can also be paid to the lender. Second of all, in most cases, you would not want to do that. One main reason, is that, as of this writing, you mortgage interest is one of the few things you can deduct against your income and this potentially reduces your income tax liability. So, if you make the lender beneficiary, then the loan will get paid in full - all deductions are gone. If, on the other hand, you make a person (a spouse) the beneficiary, then he/she will have the option to either pay off the loan, if it is best, or just use the insurance proceeds to pay the monthly mortgage payments and thus retain the interest deductibility of the mortgage loan. Last but not least, a mortgage paid on time every month looks good on a credit report.

Now, to go back to the choice you have between life insurance and "mortgage insurance", choose the cheapest. By the way, we do not consider accident only life insurance an adequate policy to cover a mortgage liability. Choose a standard life insurance policy that covers you in case of death from accidents or natural causes.

What about the bank's "mortgage insurance plans"? Warning! Warning! Some people feel that they are all set because the bank sold them a mortgage insurance policy. Two things to watch out for. First is, Mortgage Insurance from the lender can come in two forms. The first one is PMI (private mortgage insurance), which has nothing to do with death and life insurance and the other one is a decreasing term mortgage life insurance certificate. First, lets talk about PMI. PMI, will not pay off your mortgage in case of your death. PMI only covers the lender for a portion of your debt in case you default on the loan. It is often a requirement if you put less than 20% down on your mortgage at time of application. In other words, if your loan is $100,000 and you only put down $8,000 (8% of the loan), the lender needs to cover the difference (12% or $12,000) with an insurance policy that will indemnify them in case of a loan default.

Now, bank's decreasing term mortgage insurance certificate is just OK! Yes, it should pay off your loan in case of death but here are some major issues. First of all, you have no choice in beneficiaries. The lender is the beneficiary and that is it. Second of all the policy is not yours. That is why it is called a certificate. In other words, if at some point the lender sells your loan to another lender (which happens often) and the new lender does not wish to continue the life insurance certificate, they can just cancel it. If you are still healthy, you may be OK and get an insurance policy somewhere else (although at older age rates) but if you are not healthy, you may not be able to get anything or you may have to pay very high premiums for a life insurance policy. Third of all,, the lender's life insurance policy often is a decreasing term policy (we have even seem accident only policies) and what that means is that as your mortgage loan goes down, so does your insurance coverage. Yet, you still pay the same premium and it is often high. Once again, if you need to cover a loan, just get a regular life insurance policy. It will be cheaper, it will offer level coverage and most likely will be convertible (convertibility is for another article).

As we always say in all of our articles, no matter what plan you decide to go with, always ask, ask and ask more questions. Be well.

Philippe Deray - About the Author:
Philippe Deray is President and CEO of MCD Financial Services and MCD Life. Our web site address is http://www.mcdlife.com

Company Profile
MCD Life is a successful, dynamic company built on the principal of serving our customers FIRST! Our primary mission is to bring peace of mind to our clients by offering innovative, value-added products and information that place emphasis on short and long term benefits, benefits backed by selected companies with high quality assets and written guarantees.

Our Focus Life Insurance for Mortgages and other Loans
With many years of experience in the insurance business, we have developed proprietary methods to help individuals get the plan they needs to cover their mortgage or other loan obligations. Even if you do not have so perfect health history, you can get affordable insurance. We offer term insurance, whole life and universl life insurance. We will make this process as simple as possible and get you an answer as fast as possible.

Term Life Vs Whole Life Insurance - What's the Difference?

Term life vs. whole life insurance is a very popular subject when it comes to life insurance. A term policy is a policy that is allotted for a certain period of time, or term, and then paid out if necessary. The policy can be renewed if necessary before it comes to term, but if you let it lapse, you will usually lose most or all of the money that you paid in to the policy.

A whole life policy is generally started when you are young, and appreciates in value over time. The face value is what the policy is worth after a certain time (usually 100 years), and the cash value, or how much you'll actually get, is what you've paid in over time.

As you pay into a whole life policy, the premiums will increase with age. However, you can find average plans that will allow you to pay the same premium for your entire life, if you can afford to pay higher premiums to begin with.

Term life vs. whole life insurance is basically the difference between having a life policy for 5, 10, or 20 years or having a life policy from the time that you are young until you die without having to renew it or worry about policy lapses.

When it comes to the benefits of term life vs. whole life insurance, there are many different things to consider. What is beneficial to one person might not be beneficial to the next, and so on. In order to choose the right policy, you will need to consider how much insurance you need, what you can afford to spend, and where you are at financially and age-wise in your life.

Older people will fare better with term policies, while younger ones might find more advantages to the whole life policy. It's all a matter of personal choice, so you need to understand your options to make the best decision.

If you are having trouble choosing between term life vs. whole life insurance, can always talk to an insurance agent to figure out which option will be best for your situation.

Whatever you decide you need to make sure that you do not jump into life insurance unprepared because you could likely wind up getting the wrong policy, the wrong amount of coverage, or simply choosing something that is not effective based on your needs . . .

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