Life insurance is a very difficult product to buy, because of all the hotly debated reasons to buy one style of insurance over the other.
What makes life insurance such a difficult maze to navigate is most of us do not want to talk about our mortality. So when an insurance agents calls we do not want to talk to them, because they always call at the most inopportune time like when we are eating.
Then we all eventually contact an insurance agent and want to talk about the subject of life insurance, because we just had our first child. Therefore, we contact the expert, since we are not an expert on the subject of life insurance.
We contact this expert not realizing that this person has an interest in selling you what you will more readily purchase and not present what you will not buy. The reason this expert presents their product in this way, is that they are an expert. This agent knows that you have been influence by the views of well meaning parents, stockbrokers, and gurus of all types. This is the mantra of each; buy term insurance and invest the rest.
This all sounds like a great argument to hang your hat on, does it not. Now I have only one question for you; how many of us when we did buy term life insurance invested the saving over other types of insurance? I would be confident that almost no one invests the saving of our purchase.
This is similar scenario is found when we visit the local super market. When we bring our purchases to the cashier, they with much fanfare declare we have just save X amount of money. Which one of us says; since I saved $20.00, I will take that saving and invest it into my savings account. Again, I am confident that the chances of this happening are none to slim and, slim left town.
I do not want to say the insurance company tries to trick us, because they do not. In fact, the insurance company wants to sell you the best product for your needs; they do have a fiduciary relationship with you and take it very seriously.
A belief system that we hold causes you to want to look at only one product term or level term life insurance. The insurance company wants to sell you the best product, but because of your preconceived ideas, the agent sell you what you want not what you need.
Is term life insurance a good product? Yes, term life insurance is a good product it is if used correctly. When is the correct time to buy term life insurance, when you cannot afford anything else?
What is the problem with term or level term life insurance?
Term life insurance is attractive to the consumer because it is cheap. The major problem with term or level term is as you get older it get more expensive. Now if you purchase a10, 20, 30, year level term and you live to see 65 years old you will not be able to afford to renew the term policy. Because of this, most term or level term insurance policies are never collected on. In fact, only 2-3% of term or level term is ever collected by the heirs of the insured.
The product you should buy when you are young is whole life insurance, or a combination of whole life and term. I know the gurus words are still ringing in your ears; life insurance is not an investment. This is the truth; no one said life insurance is an investment, except for the gurus.
Whole life or a combination of whole life and term insurance benefits are the payments are level for your whole life, and the insurance last you whole life, hence the term whole life. There are other benefits of these products go and ask your insurance agent of these benefits.
I hope this article will at least cause the insurance consumer to investigate what is the truth about this issue. I hope all of you who read this will check my facts out and find out if I am right or wrong. No, matter you will be the better informed because of your search.