“Until Death Do Us Part” Term Life Insurance Versus Whole Life Insurance – What Gives?
Life insurance is a type of insurance that you see commercials for, your insurance agent talks about, your parents probably have it, and now you are wondering what exactly it means, what does it cover, and how much is it going to cost?
Life insurance is not a very fun topic to talk about – after all, you can’t drive with it, your home and its belongings don’t depend on it, and you don’t use it regularly like other types of insurance – but when it matters most, the type of life insurance you have and the amount of coverage you have, are equally, if not more important. Life insurance protects your loved ones- whether it’s your children, your spouse, or your parents- after you pass away; and depending on what type of life insurance you get, it is also an added layer of protection during your retirement years or when you need to withdraw money for an emergency.
Term Life Insurance
Term life insurance means there is a “term” or a “limit” to how long you have coverage. You pick the term limit for coverage (10, 15, 20 years, etc.) and if you are to pass away within that time frame, your beneficiaries receive the amount you covered. The benefit of term life insurance is that it is very affordable and can offer big coverage for your loved ones. Once the “term” expires, the benefits expire and can no longer be used for coverage. Age and health status are a factor in determining how much coverage you can have and what your monthly premiums would be.
Whole Life Insurance
Whole life insurance is considered permanent life insurance, meaning there is no “term” or “limit” to how long you have coverage. While it is considerably more expensive than term life insurance, most people get whole life insurance as protection when they have dependents and then for financial security after they no longer need coverage for those dependents or beneficiaries. Your whole life insurance does take a considerable amount of time to build cash value, but there is no penalty to withdraw (like from a retirement account)
What type of life insurance is right for me?
The type of life insurance you choose has to be something that is right for your family and your budget. Term life insurance is by far the most popular choice, but if whole life insurance makes sense with your budget and your future investment plans, consider adding whole life insurance to your policies.
At the end of the day, basic protection is better than no protection at all, and the experts at Jensen-Sundquist will help you decide what is best for you and your family, all while providing excellent customer service and answering any questions you have along the way.