The Truth About Term Versus Whole Life Insurance
It’s always a difficult decision to decide whether to purchase term or whole life insurance. There are some distinct differences between them and before you buy, you should consider your options. Term versus whole life insurance is something that many people ponder and it is to you advantage to find out all you can about each one of them.
Term life insurance policies are paid upon your death only. If you happen to live longer than the life of the policy, then you get nothing back. Whole life insurance policies combine death benefits and cash value, meaning that if you live longer than the life of the policy, you will get something back. You can cash in a whole life policy or borrow against it. You cannot do this with a term policy.
Whole life policies will cost you more than term policies. This is because a portion of your premiums are put into a savings account which will build over time. The more money you invest over time, the greater the cash value of your policy. One important factor regarding whole life premiums, however, is that they never will change over the life of the policy. Term life premiums will increase over time. The gains you make on whole life insurance are tax-deferred if you cash the policy in during your lifetime. Whole life policies, however, do not provide a very high rate of return so many people feel that your money is better invested elsewhere. So, you need to decide if you are willing to take a chance that the economy will rebound and make it worth your while to purchase a whole life policy.
It is often a very difficult decision to choose between term versus whole life insurance. Term insurance is there to provide for your loved ones if you die. Whole life is there to do the same and, in addition, give you something back if you should live. You just need to weigh the differences and determine what you are willing to pay now for coverage later. If you are willing to pay larger premiums for less insurance coverage but have something in the end, then whole life is for you. On the other hand, if you want to pay less for more coverage, then term insurance is something you should seriously consider.
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