Exploring the different types of life insurance that fits your lifestyle and budget can be hard to decide or even comprehend. With so much information out there, where do you even begin? You Matter Insurance & Financial Group broke down the two popular life insurance types to help better understand your options.
Term life insurance
It is considered the most convenient type of life insurance that is easier to understand and comes with the cheapest cost while covering you for a specific fixed time period, for 10, 20 years, or so forth.
Term Life Insurance Features:
- Deemed as most cost-effective and easy to carry life insurance and runs for a certain time phase, and for the same reason, it is called “term.”
- It offers death benefits only if you die while the policy is still intact.
- Usually, it gets more expensive with aging and needs to be extended in case if you want to be covered after the agreed term.
- Has an option to convert into whole life insurance.
Whole life insurance
Contrary to term life insurance, it isn’t straightforward and is perceived to be costing more while offering extra benefits. It is a kind of permanent life insurance that compensates you until your demise and offers a cash value account.
Whole Life Insurance Features:
- It offers coverage for the entire life and renders death benefits along with cash value accumulation throughout the policy period.
- There is a need to seek eligibility after health examination; however, it can be purchased but at a higher cost.
- It requires around 10 to 15 years for gathering a cash value, and it could be a fair choice for estate plans.
- The policyholder has an option to receive a specific ratio of value amid the policy’s lifetime.
- Whole life insurance may seem expensive in its early days but proves to be a money-saving option in the long run.
Comparison between Whole life insurance & Term life insurance
In term life insurance, the family of the deceased gets benefits, while whole life pays death benefits along with cash value.
Unlike term life, you can borrow against the money in whole life insurance.
In term life insurance, if the policy gets expired, you do not have any more right on the money, in contrast, whole life insurance never expires ever.
Option to convert.
In the case of term life, it could be converted into whole life insurance; however, for canceling your whole life insurance, you can get the cash from accumulated funds.
Value of the policy.
As understandable, the death benefit value of term life is lesser than whole life because you only seek death compensation from the policy.
Making a good financial decision can be tough, consider discussing your next step with You Matter Insurance & Financial Group where we tackle your problems and offer a solution for you and your family.