Is Term Life Insurance a Good Investment? - The Facts
Is Term Life Insurance a Good Investment? - The Facts
Trying to decide what type of life insurance is best going to suit your needs can be a daunting and confusing task. There are a myriad of options available and you must consider not only the amount of money you intend to leave behind but also your budget. Life coverage is best looked at from a long-term perspective and in some cases it can be an excellent way to invest and save money for retirement or unexpected expenses. Whole life, universal life, and variable life policies are the most expensive types of life policies because they include investment opportunities. A term life policy on the other hand can be quite inexpensive and is an excellent choice in some situations.
The biggest drawback of term life policies is that if you outlive the term, you are not likely to see any return on the investment you have made over the years. Of course, outliving the term life policy seems like a great thing but spending 10, 20, or 30 years making premiums without anything to show for it can be incredibly frustrating. Term life policies do not have any investment or savings features built into them and at the end of the term an individual will have spent their money on little more than peace of mind if they happen to outlive the policy.
There is a type of term life insurance that does not equal out to a total loss if the individual lives longer than the policy. This type of insurance is known as return of premium and allows the policyholder to get back some, if not all, of their premiums once the term has expired. The amount of money returned to the policyholder will depend on the policy and the insurance provider so it is important to carefully read any and all fine print associated with this type of policy.
A return of premium term life policy will be more expensive than a traditional term life policy but it will also mean that outliving your life insurance will not cost you a fortune. If you would like even more return on your investment or if you intend to use your life insurance policy for more than just providing benefits to your family and loved ones, it may be wise to consider one of the permanent life insurance policies with investment and savings features built in. Although they more expensive, they also offer a much greater return on your investment.
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