Is Term Life Insurance Better Than The Investment Type?

Term life insurance, which pays out if you die within a set period of time, can be the lowest cost way of ensuring your family and dependants are protected financially after your death.   But you should not treat the money you pay into such a policy as an investment as it won't ever be coming back to you in any form while you're alive since should you survive the term you have set, then the policy may not pay out anything.  But at least you lived longer than you feared you might!

Investment-type life insurance automatically pays out even if you haven't died during the period it covers (though this doesn't apply to whole-of-life insurance, which requires surrendering of the policy to access its cash while alive) so it's a way of investing your money and not just a protection measure.  However it is considerably more expensive than the protection-only term life insurance alternative and some advisers believe it's better to keep your insurance and investment needs separate.