How good an investment is life insurance?

When thinking about your career path and taking up a job that promises to pay you a decent amount at the end of every month, it is not just the immediate in-hand salary that you should concern yourself with - it is also the added perks that are worth learning about.

And it’s not only the present that you must think about, it’s also worth keeping in mind your future and that of your loved ones. Is your salary enough to pay the premiums of your insurance? Did you get a life or health insurance plan done at the right age? Are you saving up? These are the basic questions that you should think about asking yourself before taking up any job.

Most importantly, you must find out whether the company that you are about to join provides you with any insurance or not. Life insurance is considered to be one of the most significant investments, and if you are about to join a new company, consider it the right time to look into this investment and gauge whether it is really worth your money.

Whole Life Insurance and Term Life Insurance

Whether a life insurance policy is a good investment or not depends on what type of plan you are opting for. There are various kinds of life insurance policies, but here is what you absolutely have to know. Life insurance policies come in two broad categories:

  • Whole life insurance
  • Term life insurance

To put things in perspective, whole life insurance can be considered as a better plan for investment than term life insurance. Whole life insurance, like its name suggests, covers you for life. This means that you are eligible to have returns on your investments after your retirement and your family is also entitled to cash benefits after your death. However, term life insurance does not come with any such retirement perks. It only caters to your family’s future by offering them cash benefits for their survival.

Therefore, if you see it in this way, it is clearly a sound decision to go for whole life insurance. However, more often than not, advisers beg to differ with this view. So what is it that has changed in the scenario of life insurance policies? Here is some important information that will help you gain some more perspective so that the next time you think about getting any life insurance cover, you are well armed with the knowledge to make an informed decision.  

Whole Life Insurance or Term Life Insurance - Which Is a Better Choice?

Investing in life insurance policies is sure a great choice. However, what you have to look into is which policy has more perks for you. Whole life insurance ostensibly looks like a more lucrative option since the policy insures you for your entire life. It also builds cash value and looks after the financial needs of your family should the unthinkable happen to you. However, whole life insurance is usually the kind of investment you must opt for if you have some serious financial needs and complex assets that might need insurance. For those who have a basic lifestyle, investing in whole life insurance is generally not considered wise. 

Term life insurance, on the other hand, has only cash benefits that can be reaped by your family after your death. This sounds like a decent choice of investment for someone who has basic financial needs and not many complex assets. The premiums for term life insurance do not blow much of a hole in your pockets and remain constant throughout the term. However, you should understand that term life insurance serves no other benefit than to provide financial security for your family after your death. Thus, it can be argued that this kind of insurance holds supreme importance to anyone who wants a simple plan for life insurance. 

Therefore, life insurance as an investment strategy could be quite a dicey topic since there is no one specific conclusion to the argument. What might work for you and your lifestyle might not work for someone else. A whole life insurance might sit well with your lifestyle, but it does not have to mean the same for everyone else. There is no singular or universal rule that can be followed while deciding upon a life insurance policy. Life insurance policies, if you choose wisely, will always have various monetary benefits that you and your family can reap throughout your life.

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