Choosing between whole life and term life insurance can be a daunting challenge. Here are some of the major differences between each policy type to help you make a decision.
If you are looking for life insurance, then you probably already know that the two major policy types are whole life and term life. But what are the differences between the two policies and which one is right for you? Read on to learn more about whole life and term life insurance.
As the name suggests, whole life insurance policies provide life insurance coverage that last for your entire life. This means that these policies have no expiration dates. As long as you continue to pay your premiums, then your beneficiaries will receive compensation when you die. Whole life policies also include a “cash value” component. This cash value increases (or decreases) over time and allows you to borrow against your life policy.
Whole life insurance policies tend to be more expensive, more complicated, and more risky than term life policies. Because these plans carry the risk of the cash value component actually decreasing, they may not be the right financial investment for everyone. In fact, these policies are generally better suited for individuals with a lot of assets to play around with.
Term life insurance policies provide the life insurance that most people are familiar with. You select a term (usually between 10 and 30 years), and during this period you pay insurance premiums. If you die during your term, then your beneficiaries will receive compensation. However, if you die after your term has ended, then your insurer has no coverage obligations.
Term life insurance policies are generally cheaper, less complicated, and less risky than whole life policies. These policies work well for the majority of people. However, you must remember that these policies do have an expiration date. If you still need coverage after your term has ended, then you will need to shop around for a new policy.
Ultimately, selecting a life insurance policy is an independent decision that should be based on your personal preferences and circumstances. Use this information to help you decide between whole life and term life. Whether you choose whole life or term life coverage, it’s important that your life insurance is handled by a team you can trust. To speak to the knowledgeable insurance professionals you can trust, contact Unisource Insurance Associates. Serving Milwaukee and the neighboring cities of Wisconsin, we are ready to assist you with all your coverage needs.