Term Vs. Whole Life Insurance - Which Policy Is Right For You?

Life insurance is an anomaly for most people. The thought of dying or losing a loved one is a hard enough event, but the added financial burdens can push families over the edge. That's why it's important to safeguard your family in the case of an emergency event. This article is going to outline the benefits of both term and whole life insurance policies. 

Term Policies

Term life policies are life insurance policies with an expiration date. You can pick the longevity of the policy, which are usually 10, 20, or 30 year plans. When you purchase a term policy you are only going to see a pay out in the case of actually passing away. This is in key contrast to a whole life policy, which has additional benefits. 

A major benefit to term life is the initial low premium cost. The idea behind term policies is that it creates an opportunity where the insurance company can collect premiums without being obligated to make a payout if there isn't a claim before the term ends. This gives the customer a benefit in that it creates low premiums that maximizes coverage for the insured. It's ideal if you want protection for your mortgage if you pass, to help pay your kids' college tuition, or to protect your family in the case of losing the primary income earner. The biggest downside of the policy is that once the term is over, you get no cash value for the premium you paid. To combat this, there are policies that can be converted into whole life policies for higher premiums. 

Whole Life Policies

Term life policies are simple and easy to shop and compare. Whole life polices are quite a bit more complicated, but they also offer a wider range of benefits. These types of policies extend to the life of the insured, and offer not only death benefits but also cash value. So, while the whole life insurance will pay out in the case of the policyholder passing away, it also accrues tax-free money that can be used to reduce the premium or simply build up like a forced savings account. This money is paid out through dividends, much like stocks. Contrary to term life, these policies are typically more expensive from the onset as they last until the policyholder passes away, and has the added monetary benefits. 

Whole and term life insurance policies are very similar in how they work but are executed in different ways. No type of policy is inherently better than the other, but each has its own strengths and weaknesses that will better fit your goals. Once you've decided what type of policy would best suit you, you'll want to get an agent on the phone and have them shop around for you to find the best rate and benefits. 

About Me

The Principles Of Pet Insurance

Hello, my name is Bobby Parker and this is my blog about pet insurance. My wife and I have four dogs and we consider these animals our children. Whenever one of them gets sick or is not feeling well, we always take them to the veterinarian for care and treatment. Since surgery and other veterinary procedures can be expensive, my wife and I decided to purchase pet insurance. Before we bought the policy, I did a lot of research about pet insurance and I discussed the different kinds of policies that are available with my insurance agent. By doing this, we were able to get the type of insurance coverage we needed for our pets. Since I know how important animals are in the lives of many people, I wanted to write this blog to share the information I learned about pet insurance.

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