Life insurance are two words that we hear and may feel a little twinge in our stomach. Still, understanding the difference between whole and term life insurance will take a weight off your shoulders and help you understand your specific needs.
The licensed agents at Superior Insurance and Auto Tags can knowledgeably guide you through those first two words to the details behind the meanings of term life insurance or whole life insurance. Our trusted professionals will help you make the decision that works best for your family and lifestyle now and in the years to come.
What is Term Life Insurance?
Just like a school term has an endpoint, the same can be said of term life insurance. Term life insurance is available for terms of 10 to 30 years.
Your needs change as you go through the years of your life – as you pay off your house, your kids grow up and leave, or maybe you buy a second property.
Term life insurance works well as a protection for your family’s needs through the term of years you select. Since it does not include a cash-out component, it is cheaper than whole life insurance. Term insurance can be renewable.
How Does Whole Life Insurance Work?
Whole life covers you for the entirety of your life. It is the simplest form of life insurance.
Whole life insurance does build into having a cash component as your up-to-date premiums accumulate over time. They are invested and have a tax-deferred status so you won’t pay taxes on the gains.
Whole life has other benefits as it builds. For instance, as time progresses you can borrow against it or even use the dividends to pay your unchanging premium over life.
Term vs. Whole Life Insurance
Term life insurance is cheaper upfront but does not contain a cash value like whole life. It can be a good choice for a specific time when your home and family obligations are greatest.
With whole life, your coverage is lifelong, and as the cash benefits build you can use them during your lifetime. With term life the coverage for the term is the same as whole, but you may not need a medical examination and the price is much cheaper than whole life.
Questions to Ask a Life Insurance Agent
When it comes to making the decision between whole and term life insurance, it’s important to have a conversation with a life insurance agent. To help you get the most out of your conversation, here’s a list of questions you should consider asking:
- Which type of policy would be best suited for my specific needs and goals?
- How much coverage do I need, and how do you determine that amount?
- What factors affect the cost of my premiums for each type of policy?
- Can I adjust my coverage amount or switch between whole and term policies in the future?
- Are there any additional features or riders that I should consider adding to my policy?
- What is the process for making a claim, and how long does it typically take to receive the payout?
- How often will I need to review and potentially update my policy?
- What happens to my policy if I miss a premium payment or need to cancel my coverage?
Your age, health, and your family’s circumstances are a few of the major factors to consider when comparing policies. Your family’s needs should something happen to you are the best reason to contact one of our life insurance agents in PA to discuss your situation and make plans for a secure future.
The Money Factor
We all like to get a ballpark idea. However, in both term and whole life insurance the variables from one person to the next are too many to try and guesstimate.
In addition to your age, health, and present needs, the factors determining the cost include your children and your plans for their future, your own retirement plans, and concerns specific to your lifestyle and circumstances.
Once you have pondered the difference between whole and term life insurance, you may find that whole life insurance is the proper choice for you and your family.
The experienced professionals at Superior Insurance and Auto Tags are willing to work through all the nuances of your family’s situation. We will help you sort out the differences in your needs and find a life insurance policy you can trust your life with. Call or contact us today to begin your journey to protecting the ones you love.