Term or Whole Life Insurance? Archives

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.

Term or Whole Life Insurance? It depends on your circumstances and financial goals.

Generally speaking, term life insurance offers the greatest coverage for the lowest initial premium and is a great solution for people with temporary needs or a limited budget.

Whole life insurance may make more sense if you anticipate a need for lifelong protection, or if the option of accumulating tax-deferred cash values is attractive to you.

Also, it doesn’t have to be one or the other. Sometimes, a combination of term and whole life insurance might be the right answer.

Term or Whole Life Insurance?

http://www.lifehealthpro.com/2013/06/19/whole-life-vs-term-theres-a-clear-winner-here

Term vs. whole life insurance cost comparison

The Differences Between Term and Whole Life Insurance

MALE, AGE 30

Policy amount	Whole life	30-year term life	20-year term life
$250,000	$2,385	$240	$156
$500,000	$4,675	$403	$242
$1,000,000	$9,217	$720	$415

FEMALE, AGE 30

Policy amount	Whole life	30-year term life	20-year term life
$250,000	$2,114	$206	$141
$500,000	$4,142	$335	$208
$1,000,000	$8,150	$585	$347

MALE, AGE 40

Policy amount	Whole life	30-year term life	20-year term life
$250,000	$3,508	$384	$210
$500,000	$6,910	$687	$348
$1,000,000	$13,700	$1,281	$631

FEMALE, AGE 40

Policy amount	Whole life	30-year term life	20-year term life
$250,000	$3,008	$314	$185
$500,000	$5,897	$553	$306
$1,000,000	$11,677	$1,026	$534

MALE, AGE 50

Policy amount	Whole life	30-year term life	20-year term life
$250,000	$5,436	$913	$491
$500,000	$10,802	$1,725	$898
$1,000,000	$21,483	$3,301	$1,692

FEMALE, AGE 50

Policy amount	Whole life	30-year term life	20-year term life
$250,000	$4,569	$689	$375
$500,000	$9,003	$1,284	$669
$1,000,000	$17,760	$2,349	$1,233

Methodology: We averaged the three lowest quotes available in each category for healthy men and women. Source: Quotacy.

So, Term or Whole Life Insurance? The difference in cost between the two products is huge. The difference in coverage is much different, as well.