What's The Difference Between Term Life And Whole Life?
- Author Kate Wilson
- Published November 12, 2010
- Word count 428
Life insurance is one of the best investments you can make to financially protect your family should something happen to you, but with many different life insurance plans available, choosing the one that's right for you can be a little tricky. In this article we will spend some time discussing the two main types of life insurance, term life insurance and whole life insurance, highlighting the advantages and disadvantages of each to help you make the most informed decision.
Term Life Insurance:
Term life insurance is a type of policy which covers the insured for a specific and relatively short period of time. Premiums for term life insurance are significantly less than other insurance policies, with all of the money paid in by the insured going to pay for the insurance itself (and not savings, for example).
While term life insurance policies are much more affordable than other types of life insurance, there is a downside to these types of policies. These include:
At the end of the term (5 years, 10 years) the policy will have to be renewed, and renewal is not always guaranteed. If you become ill, for example, the insurance company may refuse to renew your policy. Also, as you age, the premiums for a term life insurance policy will almost always increase.
Unlike other types of life insurance, term life insurance policies do not accrue equity for the insured, and the policies have no cash value.
Whole Life Insurance
Whole life insurance is a permanent life insurance policy in which both the premiums and death benefit are fixed for the duration of the policy. As long as the premiums are met each year by the insured, the beneficiary will be eligible to collect the death benefit.
Whole life insurance is also referred to as cash value life insurance, because part of the premiums paid each month are placed into interest bearing savings which are managed by the insurance company. These funds can be borrowed against or used as collateral to secure another type of loan.
The premiums for whole life insurance are significantly higher than term life insurance premiums, not only because the death benefit is fixed, but also because there is a management fee built into the premium price structure.
Most experts agree that, if you can afford the higher premiums, whole life insurance is a much more attractive life insurance option, largely because of the added security and cash value these policies offer. For younger people just starting out, however, term life insurance is an affordable vehicle for ensuring your family is protected
Read more about how to reduce your life insurance cost or avoid the pitfalls in your life insurance.
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- Navigating Compliance for Personal and Professional Contributions
- Smart Savings: The Benefits of Buying Out of Season
- Youtube To MP3 Converter -- Free
- The Benefits of Outdoor Training
- A Fashionable, Artistic, and Modern Adventure: Three Days in Paris
- Why buy stock footage on mediaCastpro? Here are the benefits.
- GoPDF An Online PDF Editor Releases Mobiles Apps Compatible with iOS & Android: A Faster Solution for PDF Editing
- The Best AI Logo Generators in 2024
- How to prepare for a house clearance, a few tips from experts
- Adapting to Rising Parcel Rates in 2024 with Business Central and Order Ship Express
- Not All LED Lights Are Created Equal
- Zoviz Launches New Solutions Day by Day to Users as An AI Logo Maker
- Campervan Maintenance: All You Need to Know
- Fighting the Silent Epidemic: Safeguard Your Child's Future with Vitamin D Screening at KinderCure | Dr. Garima Mengi
- 5 Inspiring Stories of Women Who Achieved Gorgeous Lashes with Careprost Eye Drops
- Is Your Finance Strategy Ready for ERP Software?
- A Beginner's Guide to Starting a Career in Web3
- The Vital Role Of The Courier Industry: Connecting People, Businesses, And Communities
- Learning From Successes And Setbacks: The Importance Of Post-Bid Analysis In Professional Bid Writing
- Music And Identity: Exploring The Role Of Music In Shaping Culture And Identity
- Demystifying Dental Myths: Separating Fact From Fiction
- Expert and Little Known Tips for Limestone Floor Maintenance
- Explanation of how to improve the quality of low-resolution videos
- Do Compelling Marketing Pictures Unlock Sales Potential?
- Combining Science and Aesthetics: The Practical Benefits of Veneers
- These are my thoughts about the audience, topics, and purpose of my writing.
- Enhancing Child Health with Mindfulness: Insights from KinderCure’s Dr. Garima Mengi
- Blast Off into Adventure: 15 Must-Read Science Fiction Books!
- The Journey to Self-Love: Embracing Your Inner Worth
- Is Laser Eye Surgery A Permanent Fix?