How Much You'll Get

A standard term life insurance plan has zero return. Some life insurance comes up with features like start a 20-year term policy today, and if you don't die by 2032, you'll have received nothing. But what you get throughout the policy's term is peace of mind knowing that your death won't deprive your family. Most policyholders understand this, and appreciate that life insurance isn't planned to be an "investment" in the conventional sense.

On the other hand some insurance customers are not very convinced with the idea of sending a long series of fixed payments to a financial services firm with the confidence that they'll never see any possibility for profit. We should accept life insurance for what it. Thus the industry planned whole life insurance and universal life insurance, two variants on term life insurance that offer cash value beyond the standard life insurance death benefit. You pay a little more each month than you would with a term policy and the difference builds and can be redeemed at your convenience. An insurance policy that pretend to be an investment is rarely going to be your best option for achieving the conflicting goals of maximizing return while minimizing risk.