The world of insurance is so large it can feel easy to get lost. When you do a little bit of research about insurance you will start to have a better understanding of where to focus your search. Have you ever asked yourself, what is term life insurance? Or even better have you ever asked yourself what is whole life insurance? There are so many differences between term life insurance and whole life insurance as well. Having a professional guide you through the process is great but you can do a little bit of homework yourself first. You’ll be happy that you took a deeper look at the differences between whole life insurance and term life insurance.
The first question you should ask is what is whole life insurance? The name identifies that whole life insurance pertains to life insurance. Another word for whole life insurance is permanent life insurance. You’ll stay active for as long as you continue paying your policy premiums. The only thing that can make this insurance lapse are delinquent payments. It’s a wonderful peace of mind to know you have insurance that covers you your entire life. You don’t have to worry about a company stopping your policy because you get older.
There will be numerous customized benefits that apply to you with whole life insurance. Cash value in the insurance world applies to whole life insurance. The cash value of your life insurance policy is a lot like a savings account. Your premium for your insurance will be split up into two specific categories. Death benefit is the second category in addition to cash value. The good news is that with enough time the death benefit will begin to go down. Eventually that policy will consist only of the cash value. Is a lot of great benefits to having the cash value of your whole life insurance policy. You can use some of that money for retirement, take out a loan or even use it to help pay the policy premiums. Now that you know a little bit more about what whole life insurances we can move on to term life insurance.
One of the biggest differences between whole life insurance term life insurance is that term life insurance has a set deadline. Term life insurance usually has a lifespan of 1 to 30 years. Individuals who are looking to self-insure choose term life.
Reviewing the pros and cons of these two policies can help you decide which is best for you. Remember whole life insurance has a lot of pros including its infinite coverage date and ability to work as a savings account. With the cash value component of whole life insurance there’s a way to actually enhance your financial future.