New Perspectives on Age-Old Controversies About Buying Whole Life
or Term and Investing the Difference

Summary

Inadequate information and flawed explanations play a key role in the continuation of the controversy regarding when term or cash-value life insurance provides the superior value and the reasons or sources of the advantage. Using straightforward equations, this article’s analysis brings clarity to the subject. This new financial modeling approach to examine these alternative products could foster a transforming understanding of the different types of life insurance. This understanding then provides a perspective for assessing current life insurance marketing practices. In highlighting the many and far-reaching consequences of existing information shortcomings, this article offers fertile implications for life insurance marketing, purchasing, and regulation in the future. It concludes with a call for improved policy disclosure.