From a financial planning point of view, there are several guidelines to help you choose the kinds of insurance you should buy. The first guideline is "buy term and invest the rest", the rationale being a term policy will be cheaper for the same valueof policy compared to a life policy, and then invest the difference. Another guideline is you should buy term insurance for term needs and whole life insurance for more long term needs. There is some truth to both notions but they both simplify things to a large extent. What you should consider when buying insurance include:A typical cash value policy takes about 13 to 17 years to beat a similar combination of "buy term and invest the rest" strategy. For this reason, term insurance should be considered for needs that extend for this duration. Needs longer than this ought to be covered by whole life insurance.A whole life policy may seem more expensive in the short run but the insurance company is obliged to cover you until the agreed time frame at a constant cost. Term insurance may become progressively expensive as you get older.Discipline is a key factor when employing the "buy term and invest the rest" strategy. Unless you are sure that you can implement your strategy to constantly invest the rest and do well, you might be better off getting a whole life policy.
