What Are The Major Benefits Of Term Life And Whole Life Insurance?
I've had a lot of folks ask me what the real difference is between Whole Life Insurance and Term Life Insurance, And what
their best option is As much as I like to help, the best that I can really do is explain the difference between the two and the pro's and con's of each type of policy. This way, the consumer, to make an educated decision before you purchase a policy.
Whole life insurance provides insurance throughout your lifetime, as long as you maintain the premium payments. These
policies are in effect util your death or the age of 100 years, whichever occurs first. Some of the pro's of a Whole Life
Insurance policy are that you will also build an account that has actual cash value. It works like this. Part of the premiums paid go for your life insurance policy, and the rest goes into a savings account. You can take out a loan against this money if you need to, but it must be paid back. This gives you a bit of piece of mind in case of an emergency like unexpected hospital bills, vehicle breakdowns, home repairs or any other of lifes little emergencies.
Some of the cons of Whole Life Insurance is that it's not cheap. The premium payments for whole life will be a lot higher than a Term Life policy would be. Another concern is that as you get older the savings account feature becomes less attractive For a younger person or couple, this makes more sense because they have their entire lives ahead of them, but for someone middle aged or above, I'd buy Term and invest elsewhere.
Term Life Insurance is just like it sound "Term". This means that you are only covered for a specified period of time or a
Term. You could buy a "10 Year Term", a "20 Year Term", "Recurring Term", Guaranteed Term", ect. Did I explain this well
enough?
Term Life Insurance coverage is also known as "pure life insurance" because that's all you're buying. Here are some more
differences between Term And Whole Life unlike Whole Life policies, there's no savings account that accumulates or to borrow against. All that you're paying is for insurance. Another con is that, as stated above, some Term policies are only for that specific Term or time frame, not your entire life. {Some Term policies, such as Guaranteed Term, can be rolled over, but that's another story. You can learn more at my website.
Most Term policies are only for certain time frames. An example of how this can be used would be for the "breadwinner" of the
household who is middle aged, the kids are grown, but still in college, he or she has been paying on their major assets, like
their home, ect. for several years and they need some security to make certain that if anything happened, everything would be taken care so that the family could go on without any issues, other than the loss of their loved one. A 10 or 20 Year Term Policy might be a good option for the fictional example above, depending on their specific circumstances
My hopes are, you understand now why it's difficult to give specific advice to people without knowing their specific
circumstances. Just learning the differences between these two more popular types of insurance policies should help you to
further understand how life insurance works.
Joe Stewart is a former Life & Disability agent. He's made understanding life insurance easier for consumers. You can read
detailed explanations about life insurance at his website TheLifeInsuranceGuys.com or by clicking on Free Life Insurance Quotes
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