There are many life insurance products on the market, but they it all comes down to two: one that charges you for the whole life, and one that provides what you need when you need it. The first one is all types of life insurance with cash value features. The second one is the no frill, term life insurance.

Why? There are just too many credible experts that comment on the cons of cash value whole life insurance, while only institutions that affiliate with the industry and insurance agents praise the pros. In other words, there is a lot of blowing one’s own horns and whistle blowing at the same time. The conclusion is that term insurance makes more sense for the majority of people. I will elaborate.

Life insurance is about insuring untimely death. Young families cannot afford to have the bread winners die when there are many financial needs and liabilities, so they need to insure their incomes. It is not a get rich quick scheme. The insurance company will recoup the losses from those who die early from premiums of those who live long. If the insurance company expects a policy group to live longer, the cost will be lower and vice versa. Women pay lower premiums for life insurance because their life expectancy is longer than men in the same age group.

If you buy whole life insurance, the insurance companies expect you to die and to pay you the death benefit at some point, so they take that into account and increase the price of your insurance accordingly. The increase of price is a lot. For term insurance, the maximum period of coverage is about 30 years, so you will be much less likely to die, compared with whole life insurance.

Another huge factor that makes life insurance with cash value so expensive is the cash value feature. It gives insurance agents more commission.

In one of my articles, I have outlined all the pitfalls of cash value life insurance, and mental detours that insurance salesman imposed on customers. There were also numerous cases where customers found out the problems of some of the newer versions of cash value life insurances, such as the Variable life insurance, only when their policies got very expensive and they couldn’t afford the cost anymore. You can find the link to that article in the below.

Looking to find the best deal on life insurance? then learn about how to insure yourself by learning how to buy term and invest the difference.