Life Insurance: Which is Better, Term or Whole Life?

Life Insurance can often be a tricky subject, no one likes to imagine the worst-case scenario, but thinking about life insurance is an important part of taking care of your family. When someone passes away, they can leave in their wake mountains of debt, funeral costs, and bills that are difficult to pay. Life insurance provides a solution for the potential financial burden that may arise in the event of unforeseen circumstances. By obtaining coverage, you can ensure that your loved ones will be supported. The big question that comes into play is deciding which type of life insurance policy to purchase, term or whole life?

Term Life Insurance

A term life insurance policy is the cheaper option for life insurance. A term life policy is applicable for only a specific amount of time. If you pass away prematurely during this period of time your family would get a pay out which would cover the costs of living without you. Most term life policies come in 10, 20, and 30 year terms. You should choose the one that best fits your families’ needs.

Whole Life Policy

As the name would suggest, a whole life policy covers a person for their entire life and does not expire after a certain amount of time. This type of policy also has a cash investment that grows tax -free over time. The premium will stay the same for the rest of your life, and no matter when you pass away your family will receive the death benefit.

Which is The Best Option For You?

There is no wrong option when it comes to life insurance. A term life policy would be better for someone that cannot afford to pay large premiums. If something unexpected were to happen to them then their family would be taken care of monetarily. Most likely though, they will pay a premium and the plan will expire while they are still living. Whole life will cost more money, but that is because it is guaranteed that when you pass your family will receive money. If you are simply looking for an insurance policy that is cheap and will take care of your family if something tragic happens to you then a term policy is for you. If want to make sure your heirs have something extra to pay of estate taxes, funeral costs, and potentially have extra inheritance money than a whole life policy is probably your best option. It is also important to note that may term life policies can be rolled over into a permanent policy if the person so chooses.

Note: Coverage examples and descriptions are not absolute and are for informational are sample purposes only. Please refer to your policy for specific coverages and exclusions.