$1* Buys $100,000
Globe Life Insurance
Free Quote—Apply in Minutes
Fast Approval Process
$2.17 for Children or Grandchildren
Choosing Whole Life Vs Term Life Insurance
When thinking about buying a life insurance policy, there are usually two basic options you can select from — whole life insurance and term life insurance. There can be a variety of types of life insurance policies within these two categories. What are the differences between the two basic policies and which is the best option for you and your budget?
The purpose of a term life insurance policy is to provide a safety net to protect your dependents if something should happen to you. The payout could replace your income and help support your family. Term life insurance is usually purchased and paid for a certain period of time. At the end of the life of the policy, there isn’t usually a return on your investment for the policy.
A level term policy is one type of term life insurance that means you pay a fixed premium for a period of time. That term can be any number of years as determined by the insurance company and the policy. This kind of life insurance policy often works well for a lot of people, as it protects against the effects of inflation and unexpected changes in health that could potentially raise premiums to higher rates in other policies.
Another type of term life insurance is renewable term, which gives the option of renewing the policy regularly, but at increasing monthly rates.
There is also a decreasing term policy. This policy includes a decreasing death benefit that fits the needs of some people. If you are the breadwinner in your family with children, you may need a larger death benefit to take care of them if something should happen to you. At the end of term of the policy, you should not need the safety net you once needed as a young family, as your family obligations will have changed with your kids moving out on their own, your mortgage paid or a sizeable savings account.
If you choose a whole life policy, you are covered for the entire life of the policy at a fixed premium rate. It will not ever increase, as most term life policies do. The rate is typically higher than term life policies but it’s guaranteed to remain locked in for life. Whole life policies also carry cash value. The cash value grows slowly, tax-deferred, meaning that you won’t pay taxes on its gains while they’re accumulating. In addition, with a whole life policy, you can usually borrow money against your policy, or surrender it for cash. However, if you don’t repay the policy loans with interest, you will reduce your death benefit, and if you surrender the policy, you will no longer have coverage.
The bottom line is a term life policy may be more cost effective because it’s defined to specific period of time. On the other hand, a whole life insurance policy may be more expensive but the coverage lasts for a lifetime and the rates never increase. Either way, the importance of having life insurance to protect your family after you’re gone is what’s most important. Having some level of financial protection, whether term life or whole life, is key to making sure your loved ones are covered.
You might also be interested in...
- 10 Signs You May Not Be Drinking Enough Water
- 8 Signs You May Not Be Getting Enough Magnesium
- About Life Insurance
- Do You Really Need Life Insurance?
- Does Divorce Spell The End Of A Happy Childhood
- Globe Life is Rated A (Excellent)
- Health Symptoms You Should Never Ignore
- History of Life Insurance
- Home Cough Remedies
- How High Should Your SPF Be
- How To Be Responsible About Life Insurance
- Is Eating Organic Really Safer?
- Is White Vinegar A Safe Cleaning Agent?
- Planning Your Family For An Emergency Evacuation
- The Difference Between Power Of Attorney And A Living Will
- Reconsider Getting a Life Insurance Policy
- Setting Goals For Your Employees
- Skills that Make Bosses Want to Hire You
- The Importance of Life Insurance
- The Importance of Term Life Insurance
- Is It Time To Review Your Life Insurance Policy?
- Tips On How To Prevent E.coli
- Too Busy to Stay Healthy?
- What Is COPD And How You Can Prevent It?
- What is Term Life Insurance?
- When Insurance Becomes an Investment
- Choosing Whole Life Vs Term Life Insurance
- Why You Should Look Into Term Life Insurance
- Making Your Home Senior-Friendly
- Is Whooping Cough Making A Comeback
- Unusual Tricks To Reduce The Risk Of Heart Disease
- The Best First Aid Kit Everyone Should Have
- Beware Of Dangerous Mold
- 5 Things You Should Know About Thyroid Health
- What Your Eyes Reveal About Your Health
- Everyday Things That Can Cause Memory Loss
- How To Discuss Life Insurance With Your Spouse
- Why That Cold Won’t Go Away
- 5 Ways To Keep A Healthy Smile
- How Dangerous Is Sugar?
- 5 Warning Signs To Change Healthcare Providers
- Simple Secrets To Conquer Flu Season
- The Hidden Bad Side Of Everyday Foods
- How To Avoid The Scams That Tricked So Many
- Six Foods That May Reduce Stroke Risk
- Empty Nesters: Don’t Ditch Life Insurance Until You Consider This
- How Does Accidental Death Insurance Work?
- 4 Tips To Improve Your Credit Score
- 6 Tech Devices You Need For Family Safety
- Public Transportation Safety Tips
- Is Globe Life Insurance Reliable?
- Hazards in the Kitchen: What You Do Every Day that Puts You at Risk for a Serious Accident
- Surviving a Snake Bite
- Is Globe Life Insurance Term or Whole Life?
- The Top 4 Leading Causes of Death for People Older Than 50 and How to Avoid Them
- Nine Eye-Opening Stats That Will Make You Rethink Texting and Driving
- Risks of Dying from Cancer
- What are the Odds of Dying While Taking a Selfie?
- Can I Get an Accidental Death Quote Online?
- Buying Life Insurance for the Whole Family
- What You Need to Know Before Buying Term Life Insurance
- Advantages and Disadvantages of Getting Life Insurance without a Medical Exam
- A New Year's Resolution You Can Keep: Buy Life Insurance