Consider whether you need term or whole life insurance.
When you’re in the market for life insurance, you’ll soon find out that there is no one-size-fits-all policy. In fact, there are many different policies to choose from, all with varying coverage and premiums. Part of the search for finding the right coverage for your needs is deciding on whether you need term or whole life insurance. If you’re not sure what’s best for you, read on.
Term Life Insurance
Term life insurance covers you for a specific period of time, say 10, 20 or 30 years. You choose the term length and pay the premiums to keep the coverage. If you survive the policy duration, you will need to purchase another policy if you want to keep life insurance. Some features of life insurance include:
- Provides death benefits only
- Pays benefits only if you die while the term of the policy is in effect
- Easiest and most affordable life insurance to buy
- Purchased for a specific time period, such as 5, 10, 15, or 30 years, known as a “term”
- Becomes more expensive as you age, especially after age 50
- The term must be renewed if you want coverage to be extended beyond the term length
- Can be used as temporary additional coverage with a permanent life insurance policy
- Can be converted to whole life insurance
Whole Life Insurance
Whole life insurance does just that – covers you for your entire life. It offers permanent coverage that doesn’t expire. While it tends to be more expensive than term life, it has many benefits, including the ability to build up a cash value that can then be borrowed against. Some features of whole life insurance include:
- Covers you for life
- Provides death benefits as well as a cash value accumulation that builds during the life of the policy
- You typically must qualify with a health examination
- Can be purchased without a medical exam, but at a higher cost
- Takes 12 to 15 years to build up a decent cash value
- Can be a good choice for estate planning
- Cash value is based on how much the return on investment is worth
- A portion of the cash value can be withdrawn or borrowed during the life of the policy
- Initially has more expensive premiums than term life insurance, but can potentially save you money over the life of the policy if in force for a considerable number of years
Finding the right policy for you doesn’t have to be difficult, whether you need term or whole life insurance. Make sure you have the right life policy that steps in when your family needs it the most. Talk to a trusted life insurance advisor to determine your policy and coverage exactly. Contact Donald Weiss Insurance Services to get started on your coverage today.