When it comes to buying life insurance, the two main options for consumers are term life and whole life insurance/universal life insurance. Many people who purchase life insurance opt for whole life insurance, thinking they are getting a better deal than term life insurance. However, while Guardian is a very healthy company financially, consumers are much better off to purchase simple term life insurance. This can be accomplished by comparing term life insurance quotes online from many different companies, taking into consideration their need for insurance, how much they can afford and so forth.
With an A.M. Best Company rating of A++, Guardian Life Insurance Company has been serving customers since 1860. Originally called the Germania Life Insurance Company of America, in 1917 it became Guardian Life Insurance Company of America to reflect its emphasis on patriotism and protecting customers. Despite having a rich history of serving customers, Guardian is simply not the right choice when it comes to customers purchasing life insurance. Their term life policies are priced higher than most other life insurance companies and whole life is not the best choice for most people.
For customers who need basic life insurance, it's really no comparison between term life and whole life insurance. Life insurance is purchased for many reasons, including providing a family death benefits if the insured dies, paying funeral expenses, providing enough funds to pay estate taxes and other reasons. Simple term life insurance is called this for good reason. Term life insurance can be purchased in periods of 10,20 or 30 years. Whatever period is chosen, the monthly premiums stay the same. If the insured dies during this period, death benefits are paid out to the beneficiary so long as premium payments have been made. The younger you are when purchasing term life insurance the better, because rates can be extremely low for those of younger ages and in good health. Consider whole life or other permanent life insurance only when you need to have life insurance forever - as with estate planning, or for final burial expenses.
While term life insurance is fairly basic, whole life insurance, on the other hand, works in an entirely different fashion. While it provides permanent coverage with fixed premiums, the premiums are substantially higher than that of term life insurance. It also has a cash value component that builds over time and can be borrowed against at any time. However, while the policy pays out a death benefit, it's capped at a face amount. Once this face amount is paid out to the beneficiary, the company keeps all the cash value that has been allowed to accumulate over the years. Essentially, policyholders have spent years paying for something that in the end they rarely get to take full advantage of.
Whole life companies will insist the cash value option is a big advantage over term life insurance, but when calculated customers find they can simply invest the difference between the two premiums and come out ahead. By doing so, they have greater control over their money and may have a bigger return on investment. So for folks shopping for basic life insurance, purchasing simple term life insurance is one decision that will pay off in the years ahead.