Searching out the type of life insurance that’s right for you is not easy, but knowing the differences between term life insurance vs whole life insurance will make deciding easier, as well as possibly save you money in the long run.
Term Life-Insurance
Benefits:
- Being able to have coverage for a limited period of time, while also a disadvantage, does give you the ability to have life insurance for a period of time where you are unsure about your safety.
- Much lower price than permanent insurance. This is thanks to the low cash-out rate of policies and the competitive rates between companies.
Disadvantages:
- There is a 99 percent chance that you will have the insurance for nothing. Only 1 percent of policyholders of term policies actually pass away within the duration of coverage. However, many companies do allow for at least one extension of coverage.
- Adjustable rates can prove to be a huge disadvantage if the rates suddenly skyrocket. The only way out of that situation is to cancel coverage.
Permanent Life-Insurance
Benefits:
- Coverage lasts until the policyholder passes away unless they stop paying their monthly premiums. Additionally, almost all companies stop making the policyholder pay once they hit 100 years old and continue the coverage until the time of death.
- No worrying about coverage ends.
Disadvantages:
-High price. Permanent is much more expensive than term if only because the majority of policyholders carry coverage until they pass away, effectively cashing out the policy.
- Having coverage for an extended period of time can end in you paying for much more than the coverage is for.
The choice of term life insurance vs whole life insurance is a difficult one, but if you know your needs then you should be able to weigh the pros and cons effectively. Either way, most insurance agencies offer both types of coverage so a quick online search can lead you to lots of information on where to get coverage.
If you’re not sure on which type to get, speaking to an insurance agent should give you a clear idea of what you need, and not what you want. An agent can also weed out companies that you would not pass the underwriting for, effectively shortening your insurance shopping time. At the very least, consulting an insurance agent will give you a clearer answer to the term insurance vs whole life insurance debate.
