Julian explains that term life insurance is temporary with no cash value and only about 1% of policies pay out, while whole life is permanent with fixed premiums, builds cash value you can borrow against, and includes living benefits.
About 1%.
I'm curious, Roy. Has anybody ever talked to you about the difference between term and whole life? No, they haven't. No problem. Now, term is just like milk, eggs and cheese, right? It's got an expiration date. And now with term insurance, because it expires, once it goes away, you just kind of got to throw it out. The premiums have the ability to increase, the benefits have the ability to decrease, and there's no cash value. And one, only 1% of these ever pay out.
Well, Julian, that just sounds like a scam right there.
I wouldn't say it's a scam. They definitely have their place. But when you're looking at something like a final expense program to cover your burial, you definitely want to have something that's going to stick around. And that's why the insurance companies came up with whole life insurance. The monthly premiums never change. They never go up, they never go down. Your benefits never go up, they never go down. It builds cash value. So if you ever got into a pinch, you could borrow against it. The policy can never expire as long as the premiums are paid. Most policies even have what's called living benefits.
Hold on. You're telling me that death insurance can give you benefits when you're living?
Yep. That's why they call it life insurance.
