Reader’s Question:

I have a fairly good idea of how permanent life insurance policies work, would it be a good idea to just go for a term life insurance policy and invest the rest of my money here in Tampa, Florida, somewhere else?

Eoin

Tampa, FL

This is a very interesting question. To some people, having to pay high life insurance premiums makes whole life insurance policies not a very popular first choice for coverage. The best way to answer your question would be to first identify your purpose of getting life insurance coverage there in Tampa, Florida.

If you are only getting life insurance coverage so that family members or people who rely on your income would have financial protection in case you pass away, then it may be better to just go with a cheap term life insurance policy and put the rest of the money into time deposits, your 401(k) or an IRA. Your money would most likely enjoy higher interest rates than it would most life insurance policies.

If, on the other hand, you plan to have lifetime life insurance coverage, and would want all of your money to eventually become proceeds to your beneficiaries once you pass away, you may want to consider a Whole Life Insurance policy than other investment mechanisms. First of all, proceeds from a life insurance policy are (except for a few instances) tax-free. With whole life insurance policies your beneficiaries are already guaranteed to get a huge amount of money once you die. The same can be said about term life as well but the cost of keeping term life in the long-run is much higher then a whole life policy.

Tags: permanent life insurance, term life insurance, life insurance advise, life insurance information