Why Whole Life Insurance Is Preferred to Term Life Insurance

Many people think of life insurance as a form of insurance that is only needed during a particular period of time, specifically when you are dealing with a grown family. It is often believed that if the breadwinner dies once the children are grown the surviving spouse can make it on her/his own. This reduced the need for life insurance to only 10 to 20 years. This being the case, they usually go with term insurance, which offers protection for only a limited period of time. Since there is a fixed period of coverage, the cost of term insurance is much reduced.

Still others look at a situation that is quite different. They may ask themselves, what if the surviving spouse is disabled and unable to work? After the children are grown and on their own, the disabled spouse is still not able to support himself who the help of a spouse. When the term life insurance has expired, the disabled spouse has no safety net if his or her spouse were to die. Another case might be that of a child who becomes disabled and remains dependent unlike the other children. If the main breadwinner were to die outside of the terms of coverage there would be no support for the remaining spouse.

Another situation to consider is that of divorce. While buying term life could provide for a first family, many today are getting divorced and forming new families. Also, there are many more people today than in the past who are having or adopting children in their forties and fifties. If the breadwinner bought term insurance in his twenties or thirties, it will have will expired and no longer offer coverage just as the new family is getting started, unless it is renewable term life which becomes increasingly more expensive..

While a person in this situation at an older age is able to buy coverage, it might not be at a favored rate if his health has changed. If the person is now in poor health or has had a serious illness, like for example, cancer, insurance companies may deny the coverage or make it much more expensive. Even when your health is good, you will have to pay higher premiums if you purchase term insurance over the age of 50 as compared with at an earlier age. This would have the effect of wiping out any earlier savings that may have accrued through the purchase of term insurance. Or as little as being 10 pounds above the insurance company's ideal weight can cause an increase in price of ten percent. For those who weigh even more, rates can skyrocket.