DEAR SUN SPOTS: Thanks for a great job done!

What is the difference between term life insurance and whole life? Thanks. — No Name, Lewiston

ANSWER: Sun Spots went to a few online sources to brush up on her insurance knowledge, including the Motley Fool (http://tinyurl.com/7mklg4x) and smartmoney.com, which breaks down whole life options at http://tinyurl.com/3fjmp7e.

The basic difference is that term life insurance covers your life for a period of time, while whole life has an investment component and covers your entire lifespan.

Term life insurance usually covers a period from one to 30 years. It’s based on a simple premise: You pay the premiums and if you die, your beneficiary receives a certain amount of money.

If your term of insurance coverage ends before you die, there is usually no coverage at your death. 

The Motley Fool lists three basic types:

* Level term. You pay a fixed premium. 

* Annual renewable term. Gives you the option of renewing your policy regularly, but at increasing premium rates.

* Decreasing term. Features a steadily decreasing death benefit. This might seem undesirable, but it can be sensible for many people. You may need a bigger benefit when you’re a young breadwinner with a family to support than when you’re a retiree with grown children and a nice nest egg.

Whole (may also be called permanent or universal by some companies) life insurance covers you for your entire life. Salesmen often present it as a way to save and invest while covering your life.

Smart Money says the problems with this include:

* It can be very difficult to tell if the investments are good ones.

* Fees and commissions can be very high and eat up your gains.

* Policies don’t usually yield a decent return until 12, 15 or even 20 years of paying premiums, so cashing out early can be costly.

Smart Money notes that if you are over 50, have health issues or smoke, you may not be able to get term life insurance and may have no choice but whole life.

It takes an expert to assess the value of a whole life insurance policy, but that does not mean you should take the salesman’s word. You should probably hire someone to review the policy before you buy. 

Not everyone needs life insurance. Consider your situation.

Sun Spots has an aunt whose husband died when she was 36, leaving her with three small children to support. His life insurance allowed her to pay cash for a home, live comfortably and send all her kids to college.

On the other hand, if you have no dependents, the only expense at your death may be your funeral, which you can either save for or prepay, so life insurance might not be the best choice.

DEAR SUN SPOTS: The more queries that you answer the more it becomes apparent that you are not “from here.”

On June 26 a person wrote in about fireworks she heard a couple weeks ago asking who was responsible. Sorry, you missed the mark with your reply. You cited legislation/regulations about displaying fireworks. The person did not inquire about state laws governing fireworks.

The fireworks were done at Bates College. It is a yearly event sponsored by someone or group connected with the college. There was an article in the Sun Journal previous to the event.

Maybe someone at the paper knew about this from reading the paper or just knew about this event from the past. Rely on the locals at SJ for some of your answers. The Internet is a resource to use, but good old conversations with folks can yield more info from around.

I mean no disrespect to the job you are doing, but being a Lewiston native some answers are obvious. I am sure if you ask Bob McCarthy questions you do not know the answer to, he could help. He’s been around a long, long time! I know I have been around as long as he has. — chateauvert@yahoo.com

ANSWER: Sun Spots certainly deserves to be slapped for misinterpreting the state regulations, but she doesn’t think the error has anything to do with being from out of state.

In fact, she would argue that the fact that she has lived in half-a-dozen states and worked dozens of different types of jobs gives her an edge in dealing with the large variety of questions that come to the column.

As for Bob, Sun Spots regularly relies on her colleagues, including all the McCarthys who work at at the Sun Journal, for help. (Bill is her go-to guy on cars.)

Unfortunately, no one who read her column before it went to press noted the error, even though many are “real” Mainers. 

Sometimes mistakes just happen and, in the busy rush of putting out a daily paper, slip by. Sun Spots’ goal is to be correct with all her answers, Maine related or not. This time she failed. She is very sorry and will up her vigilance.

This column is for you, our readers. It is for your questions and comments. There are only two rules: You must write to the column and sign your name (we won’t use it if you ask us not to). Please include your phone number. Letters will not be returned or answered by mail, and telephone calls will not be accepted. Your letters will appear as quickly as space allows. Address them to Sun Spots, P.O. Box 4400, Lewiston, ME 04243-4400. Inquiries can also be emailed to sunspots@sunjournal.com.

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