Term versus whole life, without the sales script
One rents cover for a defined period; the other keeps it for life and builds cash. The obligation you are protecting picks the product.
By Meg Quillen, Cedar Landing Benefits
This argument is usually conducted by people with something to sell. The unexciting truth is that both products work, for different jobs, and the job comes first.
Start by naming what the money has to do and when.
Temporary obligations want term
A mortgage that ends in eighteen years, the years until the youngest child finishes education, the income gap before retirement savings mature — all of these have an end date. Term cover matches that shape cheaply, which is why a household can usually afford enough of it.
The classic mistake is buying permanent cover for a temporary need and, because it costs several times more, buying far too little of it.
Permanent obligations want permanent cover
A dependant who will always need support, a business buy-out, an estate that needs liquidity, a funeral — these do not expire. Whole life costs more precisely because it is designed to pay eventually rather than probably not at all.
Cash value is a genuine feature, not a sales device, but it is a slow one. Judge a whole life policy on whether the permanent need exists, not on illustration tables.
An estimate for planning, not a quote. Medicare and the Marketplace set your real figures.
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