The whole life and term life insurance are not the same, so cannot make a completely accurate comparison. That being said, it is critical to know the key differences and some of the key characteristics to help allow you to make an intelligent decision about what is best for you. For instance, you may want to consider the level of flexibility you will have with the policy. You will likely need to pay a premium that remains stable for the duration of your life. This means that if you switch jobs, die or get married, you can continue to pay the same premiums for the life of the policy.
Term life policies are designed to provide coverage for a specific period of time – as long as it takes. This includes accidental deaths, disability and illness. Many people choose to purchase term life insurance policies to provide coverage during the time they will be alive as well as in the event of some major catastrophes.
Whole life insurance premiums remain constant until you withdraw them. With whole life policies, you pay no premiums during your lifetime; you just pay a constant premium until you pass away. The benefit of whole life policies is that when you do pass away, your loved ones receive the death benefits without having to pay additional premiums. However, there are also advantages to term life insurance policies as well.
While whole life policies are designed to offer a steady level of insurance, term life policies are designed to earn a return over a specified period of time. In addition, these insurance policies are most commonly used in combination with another type of insurance policy. For example, most whole life policies will include cash value, which allows you to borrow against the cash value while it is building. However, if the borrowing is not repaid within the specified period of time, the policy will accrue a negative cash value and you will have to pay additional premiums to undo the negative cash value. Therefore, whole life policies are typically combined with variable life policies or other form of life-long insurance.
There are many differences between whole life and term life coverage. While whole life coverage has fixed premiums that cannot be changed, term life coverage is flexible, allowing you to adjust the premium in certain situations. Whole life policies are often less expensive because they pay a guaranteed premium throughout the term of the policy. However, term life insurance can help cover costs after the insured passes away.
The best way to find the type of life insurance coverage that best fits your financial needs is to speak with an experienced agent. You can also check the internet for different types of policies and reviews from previous buyers. If you do not want to take the chance on purchasing a policy, you can always consider temporary insurance or universal life policies. These types of policies can help bridge the gap between permanent coverage and your death event.