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“If you need life insurance for more than 20 years, choose whole life; for 10 or fewer years, choose term life. For the time in between, ask a licensed professional to review your situation.” This patently ridiculous advice came from an article titled Term vs Whole Life”, I read recently by someone is most definitely not a licensed professional and really should stick to something they know about.

They start off by saying, “While there is a debate in the insurance community as to which is better, each has advantages and disadvantages.” He then proceeds to say almost nothing about the proper use of term and all of what he considers the virtues of whole life.

You know, if his advice above was a reasonable, prudent approach to how to choose the right life insurance product, well, it’s not so let’s throw out that thought. The only thing in his absurd statement that makes sense is to buy term insurance if your need is 10 years or less in length.

If the need is more than 20 years, buy whole life?? Never mind that he blew right past 30 year guaranteed level term insurance, but straight to whole life? Understand that whole life is not a generic term. It is a specific product that is sold as “permanent life insurance with a savings/investment/retirement cash value feature”. It’s buying the whole pig when all you need is a pulled pork sandwich. If you truly have a permanent need, there are ways to get it without padding the pockets of some whole life insurance company. Ask an independent agent about universal life with a no lapse guarantee.

If you buy a $500,000 term insurance policy or a $500,000 whole life policy and you die, guess what? The death benefit is $500,000. Whole life guys like to talk about paid up additions. This means that each year they allow part of what you’ve overpaid them go toward buying more insurance. It’s not free insurance. You bought the pig. The pig is fat and because you paid way too much they can occasionally let you have another bite of sandwich.

Bottom line. If you have a need for life insurance, 95% of the time it is a term insurance need. You don’t need to pay extra. Eat your sandwich and invest the difference.