Vicki Gunvalson: Life Insurance Coverage Agent on Whole Life VS Term Insurance
“The difference of term to permanent. I think that term is being sold to a lot of clients under age 40 where I try to talk more permanent coverages when over age 40 with more on the estate planning side where it is something they want to have for their beneficiary’s benefit when they are an age 100.
So with term we could obviously only go 20 to 30 years but when we’re looking at 40-50 year olds I always talk to them about permanent coverage.”
When you encounter a life insurance agent like Vicki Gunvalson be very careful
Term Life Insurance is the only option when it comes to life insurance coverage. Take a real good look at what the life insurance agent is strongly recommending and their reasons behind it when they are recommending whole life insurance, universal life insurance, variable life insurance or any type of coverage that is connected to a savings or investment portion.
Whole Life VS Term Insurance Details
Permanent Life Insurance which includes Whole Life Insurance, Universal Life Insurance, Variable Life Insurance and Survivorship Life Insurance has a built in “Cash Value” but when you understand that the cash value really means nothing to your bottom line you will never think about purchasing any of the types of permanent life insurance .
Cash Value is the “investment” portion of life insurance that you can access through loans or withdrawals . The death benefit may be reduced with the withdrawals and there may be some charges which could affect your policy in the future .
Life Insurance agents that tell you the benefits of cash value either don’t know how bad a permanent life insurance policy is for you or they don’t but chances are they know how much commission they stand to make from selling one of these whole life policies to you and have chose that route instead of looking in you and your family’s best interest .
Isn’t an investment in combination with life insurance great?
The cash value is mainly the insurance company’s money even though you have an “investment” within your life insurance policy . The life insurance agent will then inform you that you can borrow the cash value portion if you have any. Emergencies, Retirement, Medical Expenses or the children’s college fund are reasons they use to promote the investment called “Cash Value” saying that you can borrow your own money from your policy. Any funds that you take out from the cash value must be paid back with interest even though it is supposedly your money.
Why Must We Pay The Funds Back With Interest?
Cash Value is more like the insurer’s money once they lock you in with a life policy. You will not have control over your money held within the whole life insurance policy unless you cancel the policy . Your investment money is the life insurance company’s money .
All your investments whether it be mutual funds or money market funds will be held in the policy until the policy is canceled or paid out as a death benefit (hefty penalty fees on your cash value if you cancel your policy too!!). Their investment options are severely limited so you only can choose from what the insurer can offer and most of the time their returns are not that great .
Leave or have the life insurance agent leave if the agent first tries to sell you a whole life insurance policy but can’t but then switches to settling for a term policy . Don’t deal with them any longer .
Term Insurance and Term Insurance Premiums
You’re paying for only the life insurance and no money goes towards any savings or investment. The amount of money that you save purchasing a low cost term life insurance policy is huge compared to buying a whole life policy . Outside of a life insurance policy you can take those savings and place them anywhere in any investment you would like (money market, CDs, bonds, stocks, mutual funds) or just leave them in your savings account .
YOU CHOOSE what investment you want for yourself OUTSIDE of the life insurance company . KEEP YOUR INVESTMENT AS FAR AS YOU CAN AWAY FROM YOUR LIFE INSURANCE COMPANY .
With a whole life policy you lose control of your money but getting a term life insurance policy you can free up a lot of money and you have full control on how you want to invest or spend it.
Having “Cash Value” just allows life insurance companies to take advantage of customers’ hard earned cash. Keep your life insurance and investment vehicles separate. You will have 100% control of the money and be better off .
Differentiating between Whole Life VS Term Coverage there is no other choice than to choose the latter: Term Life Insurance.
