Whole vs. Term Life Insurance

If you’re in the market for a new life insurance policy, you’re probably well aware that there are two basic types available to you, whole and term coverage. You could spend hours debating which one is better, but we can probably all agree that each has their advantages and disadvantages. In the end, it really comes down to which one fits your current circumstances better. Here’s an unbiased look at the two types:

Temporary Protection

A term policy lasts for a specified limit of time or its “term.” During that period, you’re covered under your insurer’s plan as long as you continue to make payments. When the period is up, you typically have the option to renew for another term, however it is often more expensive since you’ve now gotten older. For many people, temporary coverage makes a lot of sense - it gives them the flexibility to get a new plan later on and is almost always less expensive than permanent products.

Permanent Security

As you might have expected, a whole life insurance option gives you insurance coverage for your whole life and does not expire as long as you continue to pay for it. Unlike temporary plans, some permanent policies build up cash over time and earn interest. Most of the people who take out a whole life insurance plan have the financial ability to pay for it and don’t expect to ever need a new contract.

Which is Best for Me?

So which type of plan is best suited for you? Well, it ultimately comes down to your decision, but there are some important things to consider, such as will you be financially stable for a long period of time? If you are then a permanent plan might be best for you, but if you’re likely to experience financial changes or need less insurance than you might consider a term policy. Do you only want an agreement to protect your children until they’re out on their own? This option would probably make sense in that situation. Remember too that most temporary policies have the option of being converted into a whole agreement at a certain time. Either way, you can’t go wrong as both forms offer great protection for your and your family’s future.

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