If money is the only factor that is keeping you at wits end, because you are still amidst a lot of debts and consulting the debt consolidation companies, then you should perhaps buy a policy which is least expensive. However, there are other options that you will need to consider as well before deciding whether a term life insurance is more suitable for you or a cash value life insurance. Ideally, buying a term life insurance and saving the differential amount elsewhere may seem as a better option but only if the protection is required for 15 years or less. However, if there is a requirement of a policy for more than 15 years, a cash value life insurance may actually be a better strategy because after the completion of the tenure, the value of the insurance after tax payment will be much more. The amount that you have saved from a term life insurance policy may be lesser than the value that is accumulated from a cash value life insurance after the completion of the stipulated time. The choice of the policies will actually depend on the amount of money that you are willing to pay as premium or the time till which you will be requiring a policy. A term insurance policy which is generally of lesser cost will provide you with benefits till the end of life for the premiums that you pay.
However, with an increase in the age of the policy holder the premiums will also increase and although the rate of annual premium may remain rather unchanged, but it can cost you more as the policy gets nearer to the expiry term. If there is no claim made during the specified tenure of the policy, you are not likely to get any cash replacement. After the end of the tenure, there is no opportunity of getting cash benefit. A term insurance can be the best option if you are not willing to shell out a large amount as premium or want to keep it within your reach. It may also be a favorable option if your insurance requirement is only for a specified period. If you are doting on a term insurance, there is an option of a renewable policy despite a bad health condition at the end of the term. Cash value insurance is inclusive of a savings element. Although, it can cost you more than a term insurance, the levels of premium are supposed to remain consistent throughout the life of a policy holder. As an investor, you will be having the convenience of cashing in from the policy or borrowing against it for the purpose of investing the money. Moreover, the interest or earnings of a cash value are not subject to tax payments i.e. when you are borrowing an amount from the cash value insurance, you will be typically charged with an interest amount because it is considered as a debt but there are no tax amounts levied on the same. A term life insurance is a better option for policies required for a short period whereas cash value insurance will help you with a lifetime policy according to your needs and abilities.