When should I Combine Whole and Term Life Insurance?

By Compuquotes Team on March 26th, 2008

Whole life insurance covers you from the moment of the inception of the policy until the moment you die or cancel. This means that the earlier you can lock in a rate, the lower your payments on your whole life insurance policy are. This is great news for those of you who are in your twenties or thirties and just starting to think about things like insurance. Good for you for thinking about these things early!

Term life insurance is a policy that will expire after the term is ended. Terms can be anywhere from a year to thirty years, and these policies tend to be cheaper then whole life, making it easier to get a lot more coverage, but only for a limited time. At the end of the term, you have the choice to buy a new policy, likely at a higher rate, however you are not obligated once the original policy expires.

So what are they good for?
Term life insurance is great for periods of your life where you might need more coverage. This could be times when your children are small and require more money and effort to care for, times when .you are dealing with loan expenses like car loans or mortgages, or even times when you feel like you want to add a little extra coverage to your family's life insurance umbrella.

Whole life insurance is great to have for your entire life. If you are elderly, you will find it harder and harder to get insured, and term life insurance for the elderly means gambling that you will die before your policy runs out - no one wants to have to do that! Whole life should be bought as young as possible to lock in the low rates and cover your throughout your entire life. Term life insurance can be added on top of that when you are in special circumstances that require additional coverage.

Why do I need more coverage from term life?
Your whole life insurance policy is going to be more expensive, and the preference for most people is to keep the policy at a cost that will cover your final expenses and not a lot else. Term life insurance, then, would be a larger policy designed to cover you for the life of your loan or for the time that your children are at home. When your loans are paid off, your mortgage is gone, and your kids are out of the house and on their own, your insurance needs become much less. You no longer need the expensive policy that would have paid off your mortgage to allow your spouse and children to keep your family home once the mortgage is paid off, for example, and so the policy is allowed to end.

The best way to get the fullest and most useful coverage is to cover yourself under whole life insurance, and then fill in the gaps during the busy years of your life with term life insurance. This will keep your family safe and protected should the worst happen to you, and will ease your mind in the years to come.

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