Today, more than 100 million people do not have the life insurance they need. One of the reasons often cited by people with no or underinsurance is that they don’t understand the basics of life insurance. Especially the difference between whole life insurance policy and term life insurance.
In this new blog, we take the opportunity to explain the difference between these two types of life insurance and help you understand the features of each.
Generally speaking:
Term life insurance Covers you for a specific period of time, such as one year or five years, and then expires. If you don’t need it within that time, coverage will end. But you can choose to extend it for one more term. And another term after that. And such.
Lifetime insurance This is a common type of permanent insurance. So once you buy it, you have it for life. (Unless you cancel the policy or stop paying your premiums.) And unlike term life insurance, whole life insurance can accrue cash with each premium payment you make. you perform. Over time, you can access or borrow with policy cash to pay for other needs and goals — while you’re alive.
While these are the key differences between whole life insurance and term life insurance, we outline a few more differences between the two types of policies:
Difference between whole life insurance and term life insurance
| Life is limited | Whole life |
| Coverage is temporary; lasting for a specific period of time | Insurance is permanent; lasts a lifetime |
| Expires at the end of term | does not expire |
| Pay only if you die within the time limit; do not accumulate cash | Build cash with premium payouts you can access tax free |
| Can be extended at the end of the term; usually at a higher level Convertible to permanent life insurance Usually, the most affordable type of life insurance | Insurance premiums usually do not increase. More expensive than life term |
Of course, the big question is. . . Which type is right for you? Well, that depends on your particular situation. Here are a few factors you may want to consider to help you decide.
you may want to consider Term life Coverage if you are looking for:
- Replace your income
- Pay less than permanent insurance
- Provide an amount of money for your family to be able to pay short-term financial bills, such as loans, child care, or college tuition, if you are suddenly no longer around to take care of your family. take care of them.
Whole life Insurance may be a better option for you if you are looking to:
- Safe financial protection that lasts a lifetime
- Get death benefits that never expire
- Build cash in policy
