Life insurance is one of the most important types of insurance you can buy. Because you can leave your family in financial peril when you pass away, especially if it’s sudden, it’s important to be able to give them a little more security as they grieve. Understanding term versus whole life insurance will help you determine which option is right for you and your family’s needs.
Term Life Insurance
Term life insurance is perhaps the most popular because the costs are relatively low in comparison to many whole life policies. However, the cost of term life insurance will increase as you age, which is why it’s important to invest in this type of insurance as soon as possible. Policies can be purchased in terms of anywhere from one to 20 years. Many people are able to purchase a policy and then roll it over into a new one when the term ends. There is no cash value with term insurance. Term life insurance policies are often used as a supplement to increase coverage during times of higher need. For instance, for the duration of your mortgage, it can be helpful to have a policy your family can use to pay off the home in the event of your death. Another good example is keeping an additional policy while your children are young, allowing your significant other to grieve and still care for your children.
Whole Life Insurance
A whole life policy can provide coverage for the duration of your life with no set end date. Premiums are typically higher but can be reasonable if you purchase your policy at a young age. Unlike a term life policy, the premiums on whole life insurance won’t increase unless you choose to add more coverage. Another primary difference is the buildup of cash value, which can be borrowed against to pay for emergencies. This type of policy is designed to provide financial assistance to your family, regardless of when you pass away. There are no set terms for the policy. As long as you continue to pay your premiums, you are covered. A policy can’t be cancelled by the carrier. Knowing the differences between term versus whole life insurance can help you evaluate the pros and cons of each. Talking to an experienced insurance agent can also help you see the benefits more clearly. Being armed with the correct information will make your path to the right decision easier. Keep in mind the earlier you purchase your policy, the lower your premiums will be, especially if you choose a term life insurance policy. If you’re looking for an insurance agent to help you identify the differences between term and whole life insurance, contact us. Steven Graves Insurance can provide the information you need to make the right choice.