Whole Life Insurance or Term Life Insurance

Everyone would be stuck at this point of comparing between a term and whole life insurance and selecting the best one. It is always hard to anticipate which would be decent for a particular person without looking at his financial status, age and how much coverage he/she needs. So, you better contact an independent broker and do this job for you. They should know exactly what kind of coverage would be good for you. Just let them inform about certain things like the coverage you need, your health status, death benefits and so on. They will research for the best product that is available satisfying your desired criteria. Before you move on, know the advantages and drawbacks of term life insurance and whole life insurance.

The term life insurance is available to buy for a specific time period probably 10, 20 or 30 years. You might renew the policy after that period if there is an option available from the provider. If you die within the period, you should get a death benefit. In case you are still alive and the period is over, you won’t get anything in return. The best feature of term life insurance is, the premium rate is quite low. This is why people go for this type insurance as it offers a lower rate. But if you are 70, then even the premium of term life insurance becomes very high and almost similar to the permanent life insurance.

The whole life insurance is something that you underwrite for ever. It begins once you signed up and closes on the day your demise. This is also referred as permanent insurance. The most alluring feature of it is, it can accumulate a cash value against the money you pay. The extra money you pay beyond premium is sent to the savings account. This is why the premium of the whole life insurance is quite high. But the premium you pay in the first month is fixed for other months too. The amount will not vary till your lifetime. The insurance provider either save it or invest it and you get an amount. So, at the day of demise, the beneficiary gets a lump sum. You can even take a loan from the accumulated cash value and it will be deducted with interest from the death benefits if you don’t repay.

Now you should understand both advantages and drawbacks and this will help you decide a particular type.