If you are looking for life insurance, then learn the differences between whole life and term life insurance to help you make an informed decision.
When it’s time to think about life insurance, there are two main types of policies: whole life and term life. Before you choose which type of policy to get, take a moment to compare the two. Here are some of the major differences between whole life and term life insurance for you to consider.
As the name suggests, whole life insurance provides coverage that lasts as long as you live. This means that, as long as you continue to pay your premiums, your family will receive compensation when you die. Whole life insurance policies also have a unique “cash value” feature. Your policy’s cash value increases (or decreases) over time and this feature allows you to borrow against your policy.
Whole life policies tend to be more expensive and more complicated than term life policies. Additionally, because there is a possibility of your policy’s cash value actually decreasing, a whole life policy carries way more risk than a term life policy. Whole life insurance is really best suited for individuals with a lot of assets to play around with.
Terms life policies are a lot more straight forward than whole life policies. Basically, you set a term (usually between 10-30) during which you pay your insurance premiums. If you die some time during this period, then your insurer will provide compensation to your beneficiaries. However, if you die after your term has expired, then your insurer has no coverage obligations.
Term life policies are well suited for most people. They are generally cheaper and less complicated than whole life policies. Additionally, if you have a term life plan, you don’t have to worry about the hidden fees, exclusions, and risks that often accompany whole life plans. However, be aware that term life plans have an expiration date. If you still need coverage after your term ends, you’ll have to get a new policy.
These are just a few of the main differences between whole life and term life insurance. Ultimately, choosing the right life insurance policy depends on your personal circumstances and preferences. Whether you choose whole life or term life insurance, it’s important to have the right insurance professionals by your side. To speak to a team you can trust, contact the professionals at Massive Insurance. We are ready to get you covered today.