Posted by & filed under Educational.

Deciding whether to purchase whole life or term life insurance is a personal decision that should be based on the financial needs of your beneficiaries as well as your financial goals. Life insurance can be a very flexible and powerful financial vehicle that can meet multiple financial objectives, from providing financial security to building financial assets and leaving a legacy.

Here are some of the main features of term and whole life insurance.

  • Features of term life insurance:
    • Provides death benefits only
    • Pays benefits only if you die while the term of the policy is in effect
    • Easiest and most affordable life insurance to buy
    • Purchased for a specific time period, such as 5, 10, 15, or 30 years, known as a “term”
    • Becomes more expensive as you age, especially after age 50
    • The term must be renewed if you want coverage to be extended beyond the term length
    • Can be used as temporary additional coverage with a permanent life insurance policy
    • Can be converted to whole life insurance
  • Features of whole life insurance:
    • Covers you for life
    • Provides death benefits as well as a cash value accumulation that builds during the life of the policy
    • You typically must qualify with a health examination
    • Can be purchased without a medical exam, but at a higher cost
    • Takes 12 to 15 years to build up a decent cash value
    • Can be a good choice for estate planning
    • Cash value is based on how much the return on investment is worth
    • A portion of the cash value can be withdrawn or borrowed during the life of the policy
    • Initially has more expensive premiums than term life insurance, but can potentially save you money over the life of the policy if in force for a considerable number of years

Leave a Reply

  • (will not be published)

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>


six + = 12