And as you approach 60, 70, 75 years of age, the cost will probably be prohibitive
Remember this; term life insurance in the younger and mid years costs much less than permanent life insurance. No equity, no value, but you did have the coverage for the time you were paying. So you will have either died and the benefit was paid to your beneficiary, or you out lived the coverage and walk away. At the end of the lease you can renew it (up to a certain age), but the cost will have gone up.The cost might go up during the lease (term) so be sure to ask. You get the use of the home for whatever the length of the lease and the cost per year is set for the lease period. The "savings" have been spent for new cars or new washers or new furniture, or whatever, You see, savings only works if it compounds. I advise people to have a mixed portfolio with some aggressive, some moderate, and some conservative investments. Now I know people can earn higher rates than this. Next, if you need the coverage for 20 years or more, you will probably have to average 4% to 5% return on the savings between the cost of term and permanent to break even with what the value is in the permanent policy.
Rarely does the person have much saved. Then a few years later I ask how the savings are going. When someone says, Til do term and invest," I say, "Great idea." If you may have heard "buy term and invest the difference."
As you start to earn more and have the dollars available, consider converting some of that to permanent life insurance. Term does cost less in the beginning when most people need more (young kids, big mortgage). So which is better for you?? Permanent insurance does help you to force yourself to save and leave the money alone. When tax benefits promised during the sale sound too good to be true, they probably are. These hybrids are being watched closely by the IRS so be aware before you buy one. Equity in the permanent policy does not build quickly early on, unless you have a hybrid that allows you to put more money into it sooner. Should you decide to take some of that equity out, it will be a loan against the face value of the policy, just like a home equity loan is against the value of the home. And you will build equity, just like you do in a home. But just like when you get to the end of renting a home and need to move on, you will have no equity; Buying permanent life insurance is like buying a home in that the cost will be higher initially but the payment remains the same.