Life Insurance Cash Value Calculator

Life insurance calculator

When buying life insurance you first should calculate your insurance needs, then do your research to determine just exactly what type insurance you need.

Term Life Insurance policy

First let me explain the basic difference between a Term and Whole Life insurance policy. A Term policy only provides coverage for a predetermined number of years or as its name describes “term”. If you should die during the specified period of the the term, it pays the face amount of the policy to a named beneficiary. A Term Life policy can range from 10 to 30 depending on your insurance needs.

Whole Life Insurance policy

A Whole life insurance policy is a term policy with an investment component called an accumulated cash value. Because of this added feature, Whole Life is more expensive than a Term Life policy. A Whole Life policy can be written with many different features, however there are basically three types; Traditional whole life policies, Universal and Variable. Before you purchase a life insurance policy, you need to assess your needs and research these three type in order to make a prudent decision. Both whole life and term allow you to lock in the same monthly payment over the life of the policy.

Investment features

Investment counselors will advise you to buy Term Life Insurance which is much cheaper and then invest the savings into some type of monthly annuity or mutual fund. This is fine if you are a disciplined individual and can stay the course. What happens though, is when there is a real or imagined financial crunch, you quit investing and you are left with just basic insurance and no investment. With Whole Life you could borrow against the accumulated cash value, however this is less tempting. If you do borrow against, there is a good chance that you will pay it back and your investment will continue to increase.