Choosing life insurance is a personal decision but deciding whether to purchase a Term Life insurance or Whole Life insurance is quite confusing. While both provide funds in the event of an insured’s death, this is how one differentiates them from one another.
Term Life Insurance Basics
- Provides death benefits only
- Provide benefit for a ‘term’ or a specific period of your life such as 5, 10, 15, or 30 years.
- Easiest and most affordable to buy
- Lower premiums for higher insurance coverage
- Rates are flexible and can be changed after specific terms expire
- Cannot be used as cash value
- Becomes expensive, generally after age 50
- Can be temporarily used as an additional coverage with whole life policy
- If you want to extend the coverage, the term must be renewed
- Can be converted to permanent or whole life insurance
Whole Life Insurance Basics
- Covers you for your whole life
- Can build equity; provides the benefit of a cash value accumulation that builds during the life of your insurance policy
- The insured must qualify with a health examination
- Can also be purchased without a medical examination, but the cost will be high enough to pay for.
- Premiums are high than term life
- The whole life policy is more valuable in the long run
- It takes 12 to 15 years to build up a good equity/cash value
- A portion of the cash value can be borrowed or withdrawn during the life of the policy
- A good choice for estate planning
Similar Factors Taken Into Account When Deciding The Type Of Insurance?
Whether you purchase term policy or whole life, there are some variables that are taken into account:
- Your current age
- Current health condition
- Smoking or alcohol habit
- Family health history
- Financial needs of your dependents
- Age of your children
- Plans for funeral expenses
- Long term health expenses if you’re caught by seriously illness such as cancer or heart problem.
- Your mortgage and other debts
- Your children future studies expenses
- Your need for retirement savings plan
The above list isn’t exhaustive. However, it can help you understand the face value of your policy.
How Can We Help You?
Whether you want whole life or term life policy, the decision is based on several factors which our experts will take into account so that you get the right coverage for your family. To know more about us, please visit our website Person Health Insurance. Com.