Many Americans are confused about the differences between term life insurance and whole life insurance and which would be right for them. We are here to help you understand each policy and help you decide which type of coverage is right for your family.
Term life insurance comes in specific term lengths; there are usually 15, 20, and 30 year options. You pay premiums for the term length of the policy and if you pass away during that term, your beneficiaries will receive the death benefit. The amount of the death benefit depends on how much coverage you’ve opted for. Death benefits for term life usually range between $100,000 and $400,000. You want to make sure that the death benefit will cover your funeral and burial costs, outstanding bills or debt, and replace your income for a few years. Because you don’t know what may come in the future, you may want to have a little extra coverage in case you leave behind expensive medical bills. If you live longer than the term of your policy, you will have options to get all or some of your premiums back. You can then choose to get another term life policy or get a whole life insurance product.
Whole life insurance is a coverage option that covers you for your entire life. You cannot outlive this type of policy, so your death benefit is guaranteed. Child life insurance and final expense insurance are both whole life insurance products. Child life insurance covers your child throughout their entire life, even if they develop illnesses or injuries. Final expense insurance is coverage for people over the age of 50 who want to cover their funeral and burial expenses as well as other outstanding bills they leave behind. Typically whole life policies have a lower death benefit than term life, with the exception of single premium whole life insurance. Single premium whole life policies have one lump sum premium instead of monthly or annual premiums. This coverage may double your death benefit; for example, if you pay one premium of $5,000 your beneficiaries could receive a death benefit of about $10,000. Single premium whole life usually recommended for older people who will not need access to the money because the cash value is only accessible if you become terminally ill or if you pass away.
Because term life insurance generally has a higher death benefit, it is usually more popular than whole life policies. Our agents can help you decide which type of policy is right for you. If you’re interested in term life or whole life insurance, fill out the form to your right or give us a call today. We can help you get the coverage you need at an affordable rate.
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