What Is The Best Insurance Policy For Investment?

Life insurance has the ability to cover your funeral expenses and provide for those you left behind. If you have a family that depends on your salary to pay the bills and you’re interested in providing a measure of security for them, then life insurance is just the best investment you can purchase.

What Is Life Insurance?

Life insurance is a contract between you and an insurance company, whereby you pay a specified amount of money as premium to the insurance company, and in exchange, the insurance company would pay a huge amount of money as death benefits to your loved ones after you die.

Returns on life insurance policy can be used to cover day to day activities, pay outstanding debts, to name but a few. It was noted on reviewsbird.co.uk that; your finances and how long you want the investment to cover you, would help you determine if life insurance is a smart choice for you or not.

Nevertheless, before you come to a decision, you need to know that there are two types of life insurance policy and understanding them would help you to know which insurance policy to invest in. They are:

·       Term Life Insurance

Term life insurance is a policy that covers you for a specified amount of time. Just like other insurance policies which may include car insurance, it is a pure insurance. You pay a minimal amount as premium for financial protection which would last for a specified amount of time; usually 10-30 years. But in this case, the only difference is the benefit being paid out upon death.

According to the industry expert, this is the only type of life insurance most people should consider. After all the financial protection provided by the death benefit is the main purpose of life insurance. Benefits of term life insurance may include; paying lower premiums, you can pick how long you want to be covered and you can on the long run convert it to a permanent Life insurance.

Unlike the permanent life insurance, it doesn’t have any cash value. If you are still alive after the term ends, you and your beneficiaries would have no benefits paid to you.

·       Permanent Life Insurance

Permanent life insurance on the other hand comes in different forms, but the main one is whole life. This insurance covers you for your entire life, as long as your premium is paid regularly.

The benefit of permanent life insurance may include; allowing you to grow wealth on a tax-deferred basis, your coverage lasts for the entirety of your life, if you need money, you can borrow against your cash value and you have accumulated benefits to pay your medical bills, enjoy a quality living in your final months. But unlike the term life insurance, it requires you pay a larger premium.


For some high net worth individuals who want to minimize estate taxes, permanent life insurance might be advisable. But for an average person, it is advisable to purchase a term life insurance and invest the difference.