- Term life insurance provides protection for a specific period of years. Benefits can be used to help pay off mortgages and other outstanding debts in the event of death.
- Whole life insurance, also known as permanent insurance, insures you throughout your life, from the date you purchase the policy until you die, as long as you pay the premiums.
Whether you choose term or whole life insurance depends on a variety of factors including your age and where you are in life.
Term life insurance is generally the least expensive form of life insurance, and provides pure insurance protection only. It does not accumulate cash value, and generally does not receive dividends.
Another difference between the term and whole life is that whole life insurance builds cash value. Through policy loans, you can access the cash values and use them for a host of purposes such as education funding and supplemental retirement income.
Policy loans against the cash value accrue interest and reduce the death benefit and the cash value by the amount of the outstanding loan plus interest. Your policy is guaranteed for life, and will be renewed every year, regardless of your health for as long as you live, if the premiums are paid.
A whole life insurance policy is best to buy when you’re young and healthy, as the policy will remain at the same price for your entire life.
Term life insurance covers only a specified period of time rather than an entire lifetime. It can be used to protect needs that last for a predictable period, such as a student loan or mortgage. Term life insurance can be bought for specific periods of time ranging from 1 year to 30 years. They are often bought to cover life changes including the birth of children or taking on a large debt like a new home.
If the insured dies, the policy will pay off, which can help the family to take care of these debts. This kind of insurance is usually bought to cover the amount of time that the debt is scheduled for, like a 30 year mortgage.
Call Jeff Pennington today at 1-877-221-6198 to discuss your needs and get a selection of life insurance quotes for your situation. Jeff can answer all of your insurance questions and will provide friendly personal advice.