Updated: May 9, 2019
Life insurance is a great financial safety net to protect the future of your family. Each policy provides different benefits given on the time period it has been obtain for. When choosing between both policies, it is extremely important to become aware of its benefits while considering some factors such as age, current state of your health, current debts, and financial needs for your family. Based on your ultimate financial goal, each policy should be looked throughly before making a big decision.
Term Life Insurance:
The most affordable life insurance to buy, term life insurance provide the death benefits coverage to your beneficiaries in the event of your death. This policy becomes more expensive as your age since it mostly last for the term chosen. The premium will stay intact for the full term, yet once you renew the policy for an increasing term the premium will increase dramatically. Term will only provide benefits in an event of your death, and doesn't accumulate cash value compared to While Life Insurance.
The policy gives you the options of obtaining a term for 10, 15, 20, or 30 years. The price will be determined based on your health and age and will stay constant until the end of the term. We recommend our consumers to switch their term life insurance into a whole life insurance (Permanent Life Insurance) if they attain a type of health condition that could denied them to extend their term policy later.
For this reason, each policy provides different benefits to its consumers and it is extremely important to understand what each policy provides. Term life insurance provides protection from your future expenses but does not provide cash value compared to whole life insurance.
Whole Life Insurance:
As the name describes, this policy provides protection for a lifetime. Compared to term life insurance, whole life insurance also known as permanent life insurance is more expensive than a term policy.
Whole life insurance, accumulates a cash value that builds over the life time of the policy. Compared to CD's or Annuities, a Permanent life insurance cash value provides the freedom to withdraw money from the policy with no restrictions. It provides a safety net on your health since it could provide an extra cushion in case of an event where extra cash could be needed to pay any expense.
Whole life insurance is recommended for those who want life insurance protection with a guarantee that their families will receive their death benefits once they pass away. Whole life insurance can be used as safety net while given you the ability to save money with the freedom to withdraw money when needed. It will take 10-15 years for the cash value to eventually accumulate but it will provide higher benefits to consumers compared to a term life insurance. Whole life insurance premium will stay the same for its lifetime and will not increase compared to a term life insurance.
For this reason, we recommend to speak to an agent in order to decide on what policy could provide you a higher benefit. Text one of our agents, we can provide you a free quote in minutes with no obligation.