Term vs. whole life insurance Austin American-Statesman
Sitting around a campfire on a hunting trip in West Texas, I posed a question to four of my 50-year-old companions on whole life versus term life. They said to buy term. My question comes after a financial plan review with a large service-oriented insurance company. Their process is supposed to separate the financial planning aspect from the sales motive. But now I'm not so sure.
We are 50 and 46, with two kids, 14 and 8. Our net worth is about $2 million. We max out our 401(k) and contribute to a 529. We both have professional jobs. Her job is more stable than mine, but mine is relatively stable.
Our financial planner recommended whole life policies in the amount of $250,000 for each of us. I only minimally participate in my company life insurance. My wife is provided twice her salary in life insurance. She also has a $500,000 term policy with the firm our financial planner represents.
It is not clear to me why I would want whole life over term life. A second call to the financial planner failed to clarify the financial planning reasons I would want whole life versus term. A term policy is about $80 a month for 25 years. The cash value policy is $250 a month. Can you help me understand why I should, or should not, choose a whole life policy over term? — M.T., Plano
