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Term or Whole Life Insurance
No one likes to think about dying; however, you also do not want to leave this world unprepared. By having life insurance, your family will not be stuck with enormous bills after you leave this life. Two of the most common types of life insurance are term or whole life insurance. Each type of insurance policy has many advantages, so you need to decide which one is best for your needs.
Term Life Insurance
Term life insurance offers coverage for a certain term. You can purchase a policy for 10, 20 or 30 year terms, and the policy is in effect until the term expires. After your passing, a term life insurance policy will pay death benefits to your family.
Term life insurance is a little cheaper than whole life insurance. If you are on a tight budget, this type of insurance might be better for you. However, term life insurance premiums can increase as you get older. If your health declines, you could be required to pay higher premiums. Your premiums are based on your current age and health status. Life insurance rates for 45 year old male will be less expensive than life insurance for 55 year old. Keep in mind that most term life insurance policies can be changed into whole policies at any time.
The main disadvantage with term life insurance is that you can outlive your policy. If this happens, your beneficiaries will not receive any money after you die. Therefore, purchasing this policy is risky if you live a long life.
Term life insurance does not have a cash value, so your family will only receive death benefits. The policy covers the cost of the funeral, hospital bills and any debts that you might owe. Only the beneficiaries listed on your policy can receive the cash.
Whole Life Insurance
Whole life insurance will remain in effect for your entire lifetime. Like term life insurance, whole life insurance will pay a death benefit to your beneficiaries when you die. The premiums do not change as you get older, and the policy is not affected by any health issues that might arise.
Whole life insurance is an investment, so it will provide a cash value. If you have a financial emergency and need cash, you can withdraw some money from your policy. You can keep the policy in effect, or you can cash out the policy and pocket the money. This can be useful if you need to pay for your childs education or any other major expense. You can borrow money from the policy and pay it back later.
Do you need Whole or Term Life Insurance?
The type of insurance that you need depends on your circumstances. If you are an older senior, whole life insurance does not make sense. The premiums would be expensive, and so they might not be affordable. However, if you are young, whole life insurance might be the better investment. Though even if you are young, but are currently being treated for a medical condition such as depression, bipolar disorder, or epilepsy you may want to contact an agent directly for a free no obligation consultation. Each medical condition is reviewed by an underwriter on a case by case basis and your cost of insurance is determined based on how well your condition is controlled.
If you are on a strict budget, you might purchase term life insurance because it is cheaper. They are temporary and do not have cash value, so they are more inexpensive. Just be careful that when your policy expires, your family is not left without expenses to cover your funeral, burial costs and any debts that you have incurred.
Ultimately, you need to decide which type of insurance is best for you. You might consider seeking the advice of an experienced agent who will come up with a plan that suits your needs. You need to decide if you want a long-term investment or if you want your coverage to be temporary and less expensive.
When looking for coverage, you should go online to research your options. Compare different companies and the different types of life insurance policies, and see which one is best for your needs. You can then have peace of mind knowing that your family will be taken care of financially if tragedy should strike.