Term Life Insurance vs Whole Life Insurance
How do I know which is right for me?
There are two options when it come to life insurance: term life and whole life. Most people looking for life insurance as a way of family protection are looking for term life.
Term Life Insurance
Term life is offered for a specific term (typically: 10 year, 20 year or 30 year terms) and offers a face amount of coverage. If you die during the term of the policy, the insurance company will pay your beneficiary the face value of the policy.
The longer the term or higher the face value, the more expensive the policy.
Term life insurance is a more pure insurance product than whole life.
Whole Life Insurance
Whole life coverage is designed to provide “permanent” coverage vs. coverage for a specified term. A whole life policy will not expire, as long as premiums are paid.
Whole life policies have a cash value that builds up over time.
A whole life insurance policy includes not only the death benefit but also an investment component. Unlike term, whole life does not expire after a certain designated term.
The problem with whole life is that it’s significantly more expensive than term insurance.