i am almost 54 years old & i want to take out life insurance on myself. (female)?

Question

what is the difference in Term Life & Whole Life? and which would be the best one to get? and is AARP insurance a good one to look into?

Answer 1

Well, life insurance is a touchy topic because it outlines how your assets will be allocated after your death. So, you want to choose a plan that will best protect your assets and your loved-ones wellbeing after you pass away.

The difference between whole life and term life isurance is thus-

Whole Life carries a higher premium but it does not expire until. well, YOU expire. Term Life carries a lower premium, but it is only active for a fixed amount of time. However, you can withdraw the benefits at the end of the term. For example, many Term policies last for 30 years, and if you have, say a $250,000 policy, you can withdraw the earnings at the end of the term. If you don't mind me saying, you are at a tricky age. It may make sense for you to get term life, however, it is quite possible that you outlive your coverage, presumming that it is a 30 year plan. Then, you have the issue of what to do with your gains at that age. Do you want to be 85 and have to pay capital gains taxes if you should happen to withdraw? Also, who will benefit? Further, it would be virtually impossible to get a new policy at that age.

Whole Life will cost more, but the proceeds will accrue for as long as you live. Your basic dilemma, as morose as it may sound, is that you have to bet on whether you think you will outlive your coverage, should you choose Term coverage.

Life insurance is complex but that can be a good thing. For example, you can combine policies, and take out a less expensive Whole Life policy, with a cheaper premium, just to cover you for the remaining years should you outlive your term policy. Then, there are ways to structure how to allocate your gains an premium payments. For example, you can structure it so that your money goes into trust for your beneficiaries, or into IRA's for them, so that you die penniless, but your loved ones are already cared for. That is an attractive option for individuals who do not want their loved ones to incur high estate taxes when the proceeds get released unto them.

I would definitely see which plans AARP can offer you. They can set you up with something that is manageable for you and suits both your needs and those of your loved ones.

A big part of your decision will be based on whether or not you expect to outlive your coverage (and I hope you do!), should you decide on a 30-year Term policy. That said, the right advice from a qualified sales person will get you the info you need.

I know I said a lot here. But, there is a lot to say in order to understand your options. Hope that helps. Best of luck to you.

Answer 2

The difference between Whole Life and Term Life....think of it like owning a house vs. renting a house:



Term insurance is like renting a house. it's cheaper in the beginning but over the long run it's not a good solultion because the rent (premiums) will go up every once in a while. At some point the Owner (the insurance company) may kick you out (cancel the policy...typically at a certian again like 65, 75, 85 or age 100). You also build no equity (cash value) in it, so if you decide to move out (cancel the policy), you just hand back the keys and say 'thanks for the time'.



Whole life is like buying a house. It's a little more expensive in the beginning, but over the long term it ends up a lot cheaper and more stable as the mortgage payments (premiums) will stay level. As long as you keep up the mortage payments (premiums are paid) the you can't be kicked out once it's set up (doesn't expire at a certain age, etc). you build up cash value in it so if you decide to cancel at some point you'll get a little money back out of it.



If the need is less than 25-30 years, go with Term. If the need is longer then 30 years Whole Life insurance will likely be cheaper in the long run and will make sure it's there when you need it to be.



I'm not familiar with AARP's product, but the most important thing to look for in 'group' type insurance products (if you're a member you get it type thing) is to know when the underwritting is done. If it is a "No health questions" type insurance read the fine print becuase they will investigate your health history in the end and potentially find a way to deny a claim.



your best bet is to go to an insurance broker and have them go over it with you. They will be able to make sure you are getting the product that best suits your need and pay out when you want it to. They will also be able to shop around to find the best priced product for what you are looking for as well.

Answer 3

Term life gets you a lot more coverage per premium dollar. It holds no value after the term is up (so if you get a 15 year term, it will expire when you're 69, and be worthless.)



That being said, with the lower premium, you can save the difference over those 15 years, and likely have a lot more money than what the whole life policy would be worth by then. Whole Life is basically for people who need to be forced into saving their money. Essentially, its a life insurance policy, and a really low-return investment rolled into one.



Insurance agents make a LOT more money on whole life policies, because they're far more profitable for the insurance company. A good agent will steer you toward term, a greedy agent will steer you toward whole. A reasonable thing to do, if you would rather have *some* cash value, would be to hold a decent amount of term insurance (enough to pay off your house if its not already, and any other debts, plus leave something behind for children, grandchildren), and have a whole life policy that's enough to pay for your funeral.



A lot of times people will have something like $100,000-$500,000 in term insurance, and $10,000 in whole life insurance. Since you're 54, and not old by any standard - except that of life insurance companies!- the assumption is that most of your debts are mostly paid off by now (house, etc.) Your term policy shouldn't be for much more than paying off anything you owe at this point in life. Earlier in life, (say age 25-45), it should be enough to pay off debts, and replace your income for your family should you die young.

Answer 4

Whole life will cost more initially, but will last as long as you live, without the price becoming too much.



Term life will cost much less initially, and will be the better deal if you die in the next ten years, but if you live into your 70's, then either you will not be able to keep it or the rates will go up so much that you may not be able to afford to keep it.



I disagree with the premise that someone your age should have insurance for this purpose. By age 50, your retirement savings should already be more than your funeral will cost. If you have enough saved for retirement, and you die, then your retirement savings can be used to pay for your funeral, and you do not need insurance. If you have nothing saved for retirement, or you have something saved, but less than your funeral will cost, then you need to save every possible penny for retirement, and cannot afford to spend your money on life insurance, because you need the money for your retirement.

Answer 5

You don't mention what is the purpose of your purchasing life insurance. What do you want to accomplish?



Do you want to provide someone an inheritance?

Do you want to be sure to have funds for your funeral and burial?

Do you have a spouse? Family?

Do you want your heirs to be able to pay off a mortgage?

Do you want to bequeath a charity upon your death?

Will your estate need to be liquidated in order to pay inheritance taxes?



Without that crucial piece of information no one can tell you which is the best policy for you.



Term Life Insurance provides death benefit protection for a specified period of time (usually 5, 10 or 20 years). If the policyholder dies within that specified period the beneficiary receives the death benefit. If the insured does not die neither the insured nor the beneficiary receive anything. Term life insurance is a good choice if you are young, can't afford the much-higher costs of whole life insurance, and have financial obligations that will disappear in time, such as a car loan, a mortgage or insuring that funds will be available for a child's college education.



Whole Life (Ordinary Life) Insurance provides protection for your entire life. That is why it is often referred to as permanent insurance. An ordinary life insurance policy is a combination of a term insurance policy and a “savings account.” The premiums are much higher than for term insurance, and they are usually stretched out over a longer period of time. The policy owner pays a level premium, the premium is higher than term in the early years, the excess amount of premium is used to fund the savings account (also known as the cash value). Ordinary life insurance allows the policy owner to choose one of the following options, even if the insured doesn't die.



1 Receive some of the premium back in the form of a low-cost policy loan

2 Surrender the policy for cash

3 Receive a reduced life insurance benefit at death

4 Continue the current life insurance benefit for a reduced time period

Answer 6

Let's back into this. WHY do you want life insurance? What do you need it to do? If the ONLY goal, is "funeral costs", it will probably be cheaper to put that money in the bank, and just save for your funeral.



Term life, eventually expires. If you want this for the rest of your life, until you die, you want "whole life". Again, a prepaid funeral, or a savings account, might be a better deal, especially if you think you'll live at least ten more years.

Answer 7

I suggest one to try this web page where you can compare rates from different companies: http://QUOTESDEAL.NET/index.html?src=2YAxeepeTN12



RE :I am almost 54 years old & i want to take out life insurance on myself. (female)?

what is the difference in Term Life & Whole Life? and which would be the best one to get? and is AARP insurance a good one to look into?

Update: i am on a fixed income. the money will go to my son. it will be used for my funeral arrangements. AARP has a price that i can afford & the rates will go up a small amount as i get older but it will still be something that i can afford.

Follow 9 answers

Answer 8

It's unlikely that you need life insurance. Who are you trying to provide for? I assume your family is at least nearly mature. You should just roll the dice at your age.



Life insurance is for young families who need to have an income replaced so the kid(s) can still be fed, clothed, and educated.



After addition:

Unless you have something terminal, which would preclude you from getting life insurance anyway, just save/invest the premiums. Use the savings for your funeral or buy a prepaid service.

Answer 9

Depends on Why you want Insurance, who would be the beneficiary. To provide for your children's' living expenses when you die then Term is cheaper and easier.

To pay your debts then Term. Life is for investing in your long term future which at 54 is senseless

Do not buy through any organization since the cost will be extra. Check with your Bank, home insurance and car insurance company and see what they offer. Multiple policies with one company earns you a 20% discount

Answer 10

You can do this. Many companies are willing to write life insurance for people all the way up into their 80's. The older you are, however, the higher the cost. You should do it now before you get older or become uninsurable.