Whole life is like a bucket that holds money, your payment adds money to the bucket, and every year money is removed to cover the cost of insurance, the remaining money grows with interest. As you get older more of your payment is removed to cover the cost of the insurance, and less is left in the bucket to grow. Eventually the cost of insurance will rise above the amount you pay into it each year,then the “earnings” get used to keep up with the cost of insurance. when your bucket is empty your policy expires.

It is critically important to review your whole life policies periodically to make sure the policy lasts, your “whole life”.

Also it is less important to get a cheap policy than it is to make sure the company is still around to pay when you pass on.

10 year term are very cheap, but becomes expensive each time you renew it. Many life insurance agents will sell this to you at first and then have you convert it to whole life later on to try to trick you that term insurance sucks.

20 year term are also cheap and maybe an adequate coverage amount for most families. In 20 years, you might not need life insurance because you may have no financial obligations (such as kids or mortgage or loans). But if you do expect to have financial obligations in 20 years, then I would consider getting a 30 year term.

I personally own a 30 year term insurance with $250,000 coverage. I only pay about $780/year for it and I bought it when I was 24 years old. My dad had a whole life policy of $100,000 and he paid about $2400/year at age 30. He got rid of it and replaced it with a 20 year term when he was 54 years old. He currently pays about $900/year for it. As you can see, whole life policies are very expensive.

While I have term insurance, I also invest my money in a Roth IRA account. If I were to die during the term, my beneficiaries will get the death benefit and all my investments. If I outlive the term, I have an option of renewing, lowering the coverage, or cancel it. Since its only 29 years away, I expect my Roth IRA to be worth at least $1 million if I continue to invest $200/month. I don’t expect to have much financial obligations to pay (maybe just a mortgage).

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Term Life – It has a term such as 5, 10, 15, 20 or 30 years. It will covers you within the period you contract. Generally, term life insurance has lower premium than a whole life.

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I got a good life policy from them.

A whole life is a typical perm policy. With this policy you pay a fixed premium for the rest of your life, but it provides a lifetime of coverage. You pay that fixed amount no matter what happens to you, as long as you keep your premium payments. In other words, your health can start failing, get in a ring of bad luck of driving accidents, you will still pay the same premium and it will still be covered. Usual exceptions may still apply such as war and suicide.

A term policy generally runs much cheaper than perm. You are only insured for 10-20-30 or whatever years at a time. Say you purchased the 10-year-term. You pay a fixed amount for 10 years, after 10 years, it may differ per company. Most allow you to renew the policy as is (or a lower death benefit amount), and simply raise your premium based on your age, but the health that you had when you initially took out the policy. Other companies may require another medical exam. Some don’t give the option to renew. Term policies are fantastic for life insurance needs that are, well, temporary. Say a mortgage. Or a 20-year-term if your concern is your newborn until they get into college.

Perm policies are better for covering burial costs, estate taxes, getting past probate, and any charity contributions that you may want to make. Many companies offer perm/term policy conversions as people have life changes and need to make policy changes as needed.

As for best rates, it really depends what you are looking for. See if you auto/homeowners insurance company offers life insurance, they might offer a discount on your auto/homeowners insurance if you sign up. Your stock broker may also be able to help you as many are licensed for Life Insurance. You can always ask your CPA, Financial Advisor, or CFP if you have one. There are also those that specialize on life, such as MetLife and New York Life. You don’t need to figure out which product is perfect for you, but more importantly, what you want this product to do for you.

10, 20 year term – pay for a specific number of years.

Term policies tend to be lower priced than anything out there. When purchasing a Term policy, make sure it’s a level one. Level means that your payments will be the same during the lifetime of the term.

As for prices, just google life insurance.

This policy is useful in that it doesn’t expire at the end of a fixed term, forcing you to look for another policy when you’re older and possibly have developed health problems.

The problem with whole life is that it is expensive for the amount of coverage you can get.

Term life is pure insurance. A ten year term means your premiums are fixed for that term – the same for a 20 year term.

This is much less expensive – a forty year old non-smoker can get $500,000 coverage for about $350 a year. The premium is determined by age and health.

The problem with a term life policy is that you need to buy another policy at the end of the term. And since premiums are determined by age and health, you will pay a lot more.