Whole Life vs Term Life Insurance
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Contact: Amanda Edmunds
I & E Insurance Agency
Life insurance can be complicated to understand! But don’t fret! There are a number of different types of life insurance policies that are dependent on your exact needs. We’ll explore the difference between whole life vs term life insurance based on how long their protections last and their costs.
What Is Whole Life Insurance?
Whole life insurance is permanent life insurance that covers a person for the duration of their life as long as they promptly pay their premiums. Whole life insurance is the most common type of permanent life insurance!
Benefits of Whole Life Insurance
There are three main benefits of whole life insurance. They include:
The ability to withdraw funds or take out loans
Guaranteed death benefits (as long as required premiums are paid)
Fixed premiums regardless of market conditions
The largest drawback for whole life insurance is that the initial premiums are more expensive.
What Is Term Life Insurance?
Term life insurance, which is also known as pure life insurance, covers a person for a set amount of time – typically between 10 and 30 years. Once term life insurance expires, policyholders can choose to renew for another term, convert the policy, or allow the policy to terminate.
Benefits of Term Life Insurance
There are three main benefits of term life insurance. They include:
More affordable premiums
More flexible options for coverage
Covers needs that disappear after some time
The biggest drawback of term life insurance is in the name. This policy is temporary.
Should I Get Whole Life or Term Life Insurance?
Ultimately, both whole and term life insurance are viable options available for purchase… but there are key things to note before deciding between plans. If you only need life insurance to replace your income over a certain period, consider term life insurance. If you have budgetary constraints, consider choosing term life insurance as well. Likewise, if you are looking to provide for your heirs after your death, purchase who life insurance.
Term life insurance may also be better if you have loans or if you are financially responsible. Whole life insurance may be better if you own a family business, have a sizable estate, have children or dependents with disabilities or special needs, or if you are not financially disciplined.
Regardless of what type of policy you choose, purchasing a life insurance policy is an important decision that should be made prior to the moment you need insurance. Looking into a life insurance plan? Reach out to I & E’s experts. We will make sure to provide you with a plan that suits all of your needs and meets your budget.