Term Vs Full Whole Life Insurance

Comparing Term Vs Life Insurance is comparing temporary coverage to permanent coverage. Term life insurance is only temporary and Whole life insurance carries with you the rest of your life. So what other differences are there between the two in this common debate?

Whole life insurance builds cash value and Term life insurance does not. The cash value of a Whole life policy begins building in the third policy year and continues to grow with interest for as long as the policy is in force. You have the option to surrender the policy to the insurer and receive the cash value of the policy to do with as you please. You can also leave the policy in force and use the cash value to secure a loan.

Term coverage is only designed to be temporary coverage to provide a death benefit should you die during the period of time that the policy is in force. Typically, term policies are sold as and “ART”, or “Annual Renewable Term” policy. Other common periods are 3, 5, 10, 20 and 30 year term policies. When the policy renews, the premiums increase based upon attained age. The main benefit of a term policy is that you can get more insurance for less money.

Some people opt for a small Whole life policy to provide permanent protection, while simultaneously using a Term policy to provide additional death benefits for a specified period of time.

Different companies charge different premiums for the same exact coverage. One insurer may charge only $35.00 per month for a $1,000,000.00 term policy, while another charges $100.00 per month. Only by comparing policies and companies carefully will you know you’re getting the best quote.