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  • Writer's picturejimmy ting

Why Having Not Enough Life Insurance Coverage is Better than Having None

Just about everyone knows they need life insurance – the “just in case” coverage you buy and hope you’ll never need. While people often get some life insurance coverage through their employer, many purchase supplemental policies to have coverage tailored to their lifestyle.

How whole life insurance can leave you underinsured

Unfortunately, the high costs of whole life insurance can wind up pushing people into policies that aren’t comprehensive enough. It’s not that they don’t want to buy more coverage; it’s that, with whole life being so expensive, they have to purchase a smaller policy to get the monthly payment in line with the rest of their budget.

Sometimes, the salespeople who sell whole life policies won’t tell you that. Instead, they’ll explain the virtues of a policy that builds cash value – and how the lifetime benefit gives peace of mind. Of course, they’ll also explain how many whole life policies pay out dividends, which they do. But they may not encourage you to compare those potential dividends to how much you pay for your policy over time.

How much more does whole life insurance cost? At the end of the day, it really depends. Since life insurance premiums are based on age, health, state of residence, and other factors, prices are truly all over the place.

When is whole life insurance right for you?

There are times when whole life insurance is a good fit. For instance, high net-worth individuals might want to take advantage of certain tax benefits associated with a policy. Most notably, its death benefit isn’t subject to income tax, so it creates a tax-free inheritance for beneficiaries.

If you’re in the market for a new life insurance policy, make sure to compare several types of policies and their costs. While it would be great to have a policy that lasts forever, it won’t do you much good if you can’t afford to pay premiums for the level of coverage you need.

What type of life insurance should you buy?

Here’s where things get tricky: Which type of life insurance should you buy?

Term life insurance is the most popular type of coverage because it’s more affordable and less complex. With a term life insurance policy, you pay a monthly premium for a set length of time – usually 20 to 30 years. During that time, you’ll have a set amount of coverage. On the flip side, your policy is basically done and over with the day it expires. So, if you die one day outside of your term life insurance policy, your family is out of luck.

If you’re considering buying a policy, make sure you do your research before signing up. No matter your financial situation, when it comes to life insurance, some is better than none!

A 20 year term of $250,000 coverage for a 30 year old female starts at $11/month.

A 30 year term of $250,000 coverage for a 35 year old male starts at $21/month.

For more information about Life Insurance call JCT Insurance Agency at (626)354-2000 or email

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