What’s the Difference Between Term and Whole Life Insurance?
What’s the Difference Between Term and Whole Life Insurance?
Many of our decisions in life start by choosing one path or another. We can choose to rent the space we live in or buy a home. We can book a flight or drive to our destination. When it comes to life insurance, your path starts by understanding the basic differences between term life insurance and whole life insurance.
Term insurance covers the insured’s life over the course of a specific period. The term may be five years, 20 years, 30 years or anywhere in between. You may purchase a 30-year term life insurance policy to help ensure a mortgage is paid off in the event of a death. A young breadwinner may decide to take out a large amount of term life insurance to protect a young family, ensuring college will be paid for and the family’s lifestyle can continue. One of the biggest benefits of term insurance is that it is relatively inexpensive to acquire, especially at younger ages. The downside is that term insurance will expire at the end of the term and coverage will cease. There is usually no cash value build-up with a term life insurance policy.
Whole life insurance, or what is sometimes referred to as permanent insurance, will stay in force for as long as premiums are made in a timely manner. While it can be more expensive to purchase than term insurance, it has the added benefit of building up cash value over time. This cash value can be accessed through a policy loan, usually at a very attractive interest rate. The policy may also be “cashed-in” at some future date. The other benefit is that even if the insured were to become sick, even terminally, the policy can’t be canceled. Some families who have a challenge saving money will choose whole life insurance as a form of forced savings.
Generally speaking, term insurance is better for those with large financial responsibilities, who need to acquire a significant amount of coverage at an affordable price. This can include those with large incomes or large debts. It is also a way young families can cover mortgage, car, credit card and student loan payments in the event of the death of an insured, while also providing living expenses for those left behind. Whole life is often chosen for those who require less coverage and may also want to build “equity” in a policy.
So what’s right for you? Let’s discuss where you are in life and where you want to go. We can discuss any present life insurance you may have and what can be done to enhance it. Get the life insurance coverage best for your situation. Contact us today.
Do you have questions about your insurance? Find an insurance agent near you with our Agent Finder
Search All Blogs
Search All Blogs
Read More Blogs
Underfoot Upgrade: Transforming Your Garage Floor from Forgotten to Fantastic
Don’t ignore your garage floor! Discover easy and impactful ways to upgrade this often-neglected area of your home.
Unwrapping the Wiener: A Deep Dive into the History and Lore of the Hot Dog
Beyond the bun: Discover the surprising history, varieties, and enduring appeal of America’s favorite tubular treat.
The Untapped Power of Collaboration: Why Asking for Help Fuels Business Success
Stop going it alone! Discover how leveraging the expertise of others can relieve pressure and drive your business forward.
Navigating the Grandparenting Journey: Understanding Today’s Families
Grandparenting today: Learn key shifts in family dynamics to build stronger connections with your children and grandchildren.
Mapping Our Paths: The Fascinating Reasons Behind Our Road Networks
The story behind the asphalt: Explore the geographical, historical, and planning influences that shaped our modern road systems.
Neighborly Navigations: Resolving Disputes in Non-HOA Communities
No HOA, no problem? Learn how to navigate neighborly disputes effectively in communities without formal management.
Vintage Years of Vision: Four Times Hollywood Hit Cinematic Gold
Like fine wines, certain years in film history stand out for their exceptional quality and the enduring impact of the movies they produced. This article explores four such landmark years, presented chronologically, that many cinephiles consider to be among the greatest in cinematic history.
Green Means Growth: How Environmental Responsibility Can Boost Your Business
It might seem like a secondary concern when facing immediate business challenges, but embracing environmentally friendly practices can actually be a powerful strategy for improving sales, attracting top talent, strengthening your brand, and even saving money. This article explores the tangible benefits of going green for your company’s bottom line and long-term success.
The Forgotten Beauty: Unearthing the Story of the Volkswagen Karmann Ghia
Beyond the iconic Beetle and the groovy Microbus, Volkswagen produced a surprisingly elegant and often overlooked sports car: the Karmann Ghia. This article explores the history, design, and enduring appeal of this “poor man’s sportscar” that has become a sought-after collectible.
Peace of Mind at Home: Building Your Essential Supply Stockpile
Recent global events have highlighted the importance of being prepared for the unexpected. This article outlines key non-perishable food items and essential household supplies that every homeowner should keep on hand to ensure comfort, security, and resilience during unforeseen circumstances.