High coverage at low cost

I met two new friends over a cup of coffee. They asked for my advice on how to obtain high coverage at a low cost.

I said:

* if a person in the late 20s buy a whole life policy for $200,000, he has to pay a monthly premium of $300

* if he buys a 20 year deceasing term assurance, the premium is only $20 a month.

They were surprised that the secnond plan is so affordable.

I explained that they can invest the difference of $280 into a unit trust or mutual fund, and get a good return over the next 20 years, and have a flexible savings plan.

"Why did not insurance agent not offer this option?"

The reason: the insurance agent earns much more by selling a whole life policy, instead of a decreasing term policy.