Enrolled Agent-licensed to practice before the IRS, Samuel N Smith, EA, South Carolina
Term Life is a non-cash value life insurance plan that can be used very effectively for financial planning matching the policy to 10 year objectives, 20 year objectives, or 30 year objectives. When term life was first introduced it was justified by "buy term and invest the difference". In other words save money by buying term and then select an aggressive growth mutual fund or if you prefer a savings account and when the term has expired for the purpose of the "term life policy" you do not want to have to buy term again because now you will be 10, 20, or 30 years older and since buying life insurance is a factor of what is the liklihood of your deatn I am sure you understand the older we get the higher the risk of our death
No, Term Life Insurance does not have a cash value. It's relatively inexpensive price is due to it's being pure life insurance protection, without any of the premium going to the accumulation of cash value.
Return of Premium (ROP) Term Life Insurance does pay back the premiums paid in, if the policy is retained to the end of the term, and if the insured person is still alive at that time.
President, Lane Independent Agency, Southern California
Term does not have cash value. It is meant as temporary insurance, until someone can get whole life insurance, which does have a cash value it builds up daily. New York Life has several Term policies which can easily be converted to whole life without a medical exam. It is a financial tool. If you are very limited now in cash, New York Life reduced some of it's Term policies by 30% this month. Please call me and we can together discuss what makes the most sense for you personally.
Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482
No, Term Life Insurance is designed to provide "pure protection". It is a low cost answer to the need for life insurance without many of the additional benefits that Permanent Life Insurance plans can provide, One of those benefits that is provided in some form by Permanent nsurance is some form of "cash value" which term does not offer.
Sales Representative, Liberty Mutual Insurance, Eugene, Oregon
Term insurance does not have a cash value. Term insurance is designed to protect you for a period of time such as 10, 20, or 30 years. During this period your entire premium is paying the cost of insurance.
Whole life insurance has a cash value, and provides protection for your whole life. There are usually several options 20 pay (pay your premiums for 20 years), paid up at 65 option, and traditional whole life.
There are a lot of options when it comes to life insurance, and it is always a good idea to consult with your agent for the type that fits your need and your budget.
Insurance Advisor, Lordship Insurance Services, California
No. Term Insurance carries no cash value and does not accumulate cash value. This type of insurance is intended to offer pure coverage and tends to offer more coverage in terms of death benefit. The majority of the people who purchase this type of cover only want protection and not cash value. There are many other vehicles that can offer cash accumulation
In the public understanding of the word "Term" there is much confusion. In the insurance world term defines the period of coverage with just enough premium to pay for the risk of death and handling costs. Since there is no extra premium beyond this minimal cost factor there is no cash value and at the end of the period the insurance expires the same as insurance on your car, home or liability. The misconception comes when persons get this "term" mixed up with paid up policies that are paid up at the end of a certain period. These paid up policies require much more premium and in a nation that has known a lot of inflation are usually not a good buy from a financial standpoint. One of the better types of Life Insurance in today's market is the Universal Life which can be made into term, paid up insurance, retirement life and many other options. The Universal Life policy puts the policy owner in control but it also means that the policy owner must completely understand the provisions in the policy or it can actually work against the owner. It also means that the financial planner must stay in close contact with the policy owner through out their lifetime. This would be even more true when the financial planner uses term in a total financial program for individuals.
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Return of Premium (ROP) Term Life Insurance does pay back the premiums paid in, if the policy is retained to the end of the term, and if the insured person is still alive at that time.
Whole life insurance has a cash value, and provides protection for your whole life. There are usually several options 20 pay (pay your premiums for 20 years), paid up at 65 option, and traditional whole life.
There are a lot of options when it comes to life insurance, and it is always a good idea to consult with your agent for the type that fits your need and your budget.