RSS FeedTerm Life Insurance vs Whole Life Insurance: Help!
Choosing the right type of life insurance is certainly not an easy task. Many people have heard of term and whole life insurance but may not know exactly what each offers. The question about whether one kind of life insurance is better than the other has been debated by financial experts for quite some time, and there has never really been a resolution to the debate. So lets take a look at term life insurance vs whole life insurance to see which one may be the better choice for you.
Term Life Insurance Explained
As the least expensive way to enter into a life insurance policy, term life insurance offers a no-frills approach to life insurance. Term basically provides death coverage that is paid to your beneficiaries when you die (heaven for bid), and it does not offer any kind of interest, investment vehicle or opportunity to borrow against the premiums you’ve paid each month.
Term offers the lowest monthly premiums amongst all life insurance coverages. Term life insurance rates typically are very affordable, and you can obtain a substantial amount of coverage – assuming that you’re healthy and under a certain age (typically 65-70). It’s not uncommon for a healthy person in their twenties or thirties to obtain a term life insurance policy with anywhere from $250,000 to $500,000 or more in coverage for as little as $10-$20 per month. Term life insurance rates are totally dependent on the company you go with, how healthy you are, your age and how much coverage you want. Most term life insurance plans offer anywhere from 10 to 30 years of coverage where the rate stays fixed, but there are also variable plans available as well.
Whole Life Insurance Explained
On the other hand, whole life insurance is much more complicated than term. Basically, whole life insurance offers the same type of death benefit as term, but it also includes an investment component as well. As you may well imagine, this means that whole life insurance costs much more than term life insurance in relation to monthly premiums for the equivalent amount of coverage. So what do you get for all this extra money you’re contributing?…
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