Why is term life insurance usually the better choice for the average middle class family?

Term life insurance is different from whole or permanent insurance. It has a specific time period and will run out if you do not die in the specified period. ( A good thing!!)  Whole life is usually much more expensive because it offers an investment component. It also has a much smaller death benefit. These policies are usually sold and not bought. They pay out much higher commissions than term life so an unscrupulous agent will often offer them as the first choice. It will take many years to earn back the commissions paid and if you forfeit the policy the agent still keeps his money and you are left with nothing. These policies can be of some value to wealthy individuals looking for a tax shelter. The average person cannot afford the high premiums but more importantly they cannot take the risk of underinsurance. A family just starting out needs to cover about twenty years of living expenses plus college costs. This can only be accomplished by purchasing a term policy. If an agent is pushing a whole life policy on you with promises of great investment returns plus insurance benefits, find a new agent!

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