What is the difference between term/whole life insurance vs accidental death insurance?
Correct. Term/whole life insurance covers you if you die, no matter what the cause. Accident only covers you if you die by accident – not murder, not old age, not cancer, not heart attack, not stroke. Not covered. Universal life is tricky. Unless the interest is added to the face value for payout, it’s not taxable when you claim it. And when you surrender the policy, it’s only taxable if there’s a GAIN – ie, you get back more than you pay out. Which is pretty rare. Bottom line – insurance is good if you die. Investments are good if you live. And insurance isn’t a good investment. It’s a good PLANNING tool, but not a good wealth building tool. Don’t buy accidental death. Don’t buy whole or universal. Buy term, invest the difference, and you’ll be MUCH better off in the long run. RUN THE NUMBERS. Do the math. The numbers speak for themselves.
