A. To start with, every family should have life insurance coverage, and term life is the starting point. If you are considering permanent life insurance, another option could be "buy term and invest the difference". The idea is that investing the difference would replace or exceed the cash value accumulation of permanent life insurance.
If you are deciding if this strategy is right for you, you need to consider what best suits your personal objectives and circumstances. For example:
- You may not have the discipline to actually invest the difference.
- You need the discipline not only to invest the difference, but also to invest early while the difference between the amount of your term insurance premium and the amount of the premium for your permanent insurance is the greatest.
- You need to make up early for the dramatic increase in the cost of term insurance at later ages.
- If you need to renew or reapply for your term policy, the cost may become prohibitive as you get older or if you develop health problems.
- If health problems occur, you could become uninsurable and not even be able to purchase term insurance when it comes time to renew.
- The investment you choose may not perform as hoped for. (This can also happen with variable life insurance, that's why I am against variable universal life for most people.)
Carefully weigh knowledge about your habits and self discipline along with the benefits, risks, product features, and any current or future charges associated with any insurance and/or investment product before making