Term life and whole life insurance are two common types of life insurance policies, each with distinct features. Here’s a breakdown of their differences:
Term Life Insurance
- The coverage period is for a specific term like 10, 20 or 30 years.
- Premiums are usually lower and fixed for the term.
- The payout is only if the policyholder dies with the term.
- There is no cash value, only used for protection.
- Term life is ideal for those looking for affordable and temporary coverage.
Whole Life Insurance
- The coverage period is for a lifetime while the premiums are paid
- Premiums are usually higher than term but fixed.
- The payout is a guaranteed death benefit.
- Builds cash value over time, which can be borrowed against or withdrawn.
- Whole life is ideal for those looking for lifelong coverage and a savings component..
Which One Should You Choose?
- If you only need coverage for a certain period (e.g., until kids are grown or a mortgage is paid off), term life is usually the best and most cost-effective option.
- If you want lifelong coverage and a financial asset you can borrow from, whole life may be a better choice.
If you have other questions, contact the agents at OHL Insurance and Financial Services in Manor PA & Glendale Arizona to assist you in picking the right life insurance options.