Whole Life versus Term Life Insurance
Posted on May 16th, 2010
People often debate whether one form of life insurance is better than another. Some are firm believers that whole life insurance is the best option, while others consider term life insurance to be better. Everywhere you look you will be bombarded with information telling you why one is more beneficial than the other. Term life insurance covers you only for the specified term while whole life insurance will cover you until you die or until you reach the age of 95-100 depending on your policy.
It is therefore important to know which policy you are getting and which one would be better suited to you. If you get the wrong policy you could end up being financially worse off than you thought you’d be. Choose carefully and weigh up the pros and cons of the policy you want to choose. A term life policy will only cover you for the amount of time you specify. If you are still alive after the term has expired then you will receive no benefits from this type of policy. This is a popular policy for covering the term of a mortgage. This means that if you die while you are still paying your mortgage, then your policy will cover what is owed on the mortgage.
A whole life insurance policy is seen as advantageous over a term life insurance policy because it involves a build up of cash right from the word go. This means that as well as paying the premium that you would be paying for term life, you are also investing. You can choose between a fixed whole life policy where you will pay the same amount every payment or a renewable term which involves premiums which increase.
Another benefit of whole life over term life insurance is that your coverage will never change and you will have security for your whole life. Your cash payout is also guaranteed. This means that whether you die during the policy or if you reach the age of 95-100, you or your beneficiaries will be guaranteed a cash payout. This can give you peace of mind and security.
The only drawback with whole life insurance is that the premiums will work out more expensive than those with a term life insurance plan. But this is a small price to pay for the assurance that you will not be paying into a policy for years to have no benefit from it unless you die!
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Tags: Insurance, Life Insurance, Term Life, Term Life Insurance
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