Consumer buys insurance to protect themselves from financial devastation in case of an unexpected or unforeseen loss. Be it life, title, property, home, mortgage, health, car, renter’s insurance, etc.
Since most families do not have enough savings, they do rely on the insurance. For example, people buy car insurance so that in case of an accident, the insurance is the one who’s going to pay for the property damages and medical expenses to you or to the other party. For life insurances, it is used to pay for the loss earnings of the breadwinner in case he/she dies.
However, which life insurance would you buy?
There are two kinds of life insurance, whole life and term life insurance.
People should purchase term insurance because it is cheap and gives you more covergage for your buck. The whole life insurance has a savings component that you really don’t need. You can save the money on your own for a better return. In fact, most financial planners would advise an individual to buy term and invest the difference of the premium from a whole life policy with the same coverage.