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Term insurance makes comeback

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``Buy term and invest the rest.'' That seemingly vague phrase had a lot of meaning several years ago. Financial planners, money managers, anyone except life insurance salesmen, used that phrase when telling people not to buy whole life, but to buy cheaper term insurance and invest what they saved on premiums - the rest - elsewhere.

The phrase worked very well into the early 1980s, as term insurance accounted for some 60 percent of the face value of all insurance sold in the United States.

But by 1986, that share had dropped to 37 percent, after the insurance industry fought back with variable life and universal life policies, which combined some of the features of whole life and term insurance.

Now, however, term insurance seems to be making a comeback. Lower interest rates than before on the investment portions of variable and universal life have made them less attractive and, while term insurance was out of favor, insurance companies made some changes in these policies to give customers more options and flexibility.

Some of these changes were discussed in two recent - and useful - publications. Financial Planning magazine used to be available only to financial planners and other professionals in related fields. Now, anyone can subscribe by sending $48 to Financial Planning, Drawer CS 198134, Atlanta, GA 30384. While it is still aimed chiefly at planning professionals, the magazine's discussion of financial products, trends, and issues will be easily understood by most laymen.

The other publication is a book from Consumers Union, publisher of Consumers Report magazine. ``Life Insurance: How to Buy the Right Policy from the Right Company at the Right Price'' (Consumer Reports Books, New York, $12) is a well-researched guide to understanding and comparing different types of policies from all kinds of companies.

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