Term Vs Whole Life Insurance – Comparisons And Conclusion

Term life insurance is your “no-frills” insurance, cashing out when the person dies. The policy isn’t worth a dime until the insured person dies. You can’t take out any loans against this type of policy and if you stop paying, your money goes down the toilet because you won’t get anything back for a failure to pay premiums.

Term life insurance will get you a lot of coverage for less money. If you need a policy but don’t have a lot of money, this is probably the best route for you.

Whole Life Insurance-

Unlike term life insurance, whole life policies develop a cash value over time, getting bigger each year. You can take out loans against these policies if you need to. Whole life policies are more expensive than their cheaper counterparts, you will probably get more for you money during the duration of the policy.

Sometimes the net value of the whole life policy might actually be more than premiums you’ve invested into it in past years. The reason for this is because the insurance company invests the money too. After they take a cut, the rest is yours. After a certain amount of time, you may not have to pay premiums anymore, but you’ll still have the same coverage.

In the business, this is called “paid up whole life.” Which should you choose? It varies depending on your particular situation. If you’ve got kids and not a lot money, you should at least have term life insurance which you can most likely afford. But if you are fortunate enough, you should go with a whole life policy if you have the financial means to, because it will most likely be a more solid investment with a bigger return.

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