When you boil things down, you really have two options when it comes to life insurance term vs. whole life. When considering which type of life insurance you should purchase, understanding the basics, benefits, and realities of both term or whole life insurance is important in making a decision that is best for you.
Term Life Insurance –
Also known as pure life insurance, is a type of life insurance that guarantees payment of a stated death benefit if the covered person dies during a specified term. Benefits for term life insurance are low initial cost, You can match terms to needs, and it is convertible. Convertible means that most term policies can be converted (age limitations typically apply) to a whole life policy if your temporary needs evolve into lifetime needs.
Whole Life Insurance –
Whole life insurance is one type of permanent life insurance that can provide lifelong coverage. It provides a variety of guarantees, which can be appealing to someone who doesn’t want any guesswork after buying life insurance. Whole life insurance combines an investment account called “cash value” and an insurance product. As long as you pay the premiums, your beneficiaries can claim the policy’s death benefit when you pass away. Benefits for whole life insurance are lifetime coverage, premium options, estate planning, and dividends. Premium options are typically paid until age 100, but there are policies with a limited payment period where the premium is fully paid in a specific number of years.
Good financial decision-making is based on solid research and sound advice. If you’re considering term life insurance vs. whole life insurance, be sure to discuss it with your insurance agent.
Ready to get term or whole life insurance? Please feel free to get a quote online right here or give our agents a call at (724) 327-2600.