Term Life Insurance vs Whole Life Insurance...

There are many American who would like to have life insurance on either themselves and/or their loved ones, however some people think life insurance is just too complex to understand. Confusion is one of the biggest barrier’s consumers and advisors face (Conron, 2019). Life insurance can seem very complicated, but truth is, it is very simple. There are two basic type of life insurance, term life insurance and whole life insurance.

A term life insurance policy is the easiest to understand and is typically less expensive than a whole life insurance policy. Term life provides life insurance coverage for a specified amount over a specific amount of time, after the terms of the policy expires, so does the life insurance coverage. For example, a 20-year-old can have a 20-year term life insurance policy, when he turns 40 years old, the terms of the life insurance expire, and he no longer has life insurance coverage. Term life insurance is cheap because it is temporary and has no cash value; in most cases, your family won’t receive a payout because you’ll live to the end of the term (Marquand & Marder, 2020). A term life insurance policy can also be renewed or converted into a whole life policy at the end of the terms.

Whole life insurance, or permanent life insurance is life insurance that provides coverage for your entire life. It also incurs a cash value, which is tax deferred money that has grown from the policy. You can borrow against the accumulated cash value, but the amount is subtracted from the death benefit. Annual dividends are available on some whole life policies. You can take the dividends in cash, leave them in your account to earn interest or use them to decrease your premium payments, repay policy loans or buy additional coverage. Dividends are not guaranteed (Marquand & Marder, 2020).

There are advantages to both life insurance options. If want the most affordable coverage, then you need a term policy. Or if you want to spend your retirement savings,

and still have money to pay for your final expenses, whole life might be your best option. However, if you are still unsure whether term life or whole life is best for you, contact The Sheek Life Agency today! Our agents are trained life insurance professionals who would love to help you secure your family’s future.

"Life insurance is the one of the most important gifts you can give to your loved ones. Whether you choose term life or whole life, show your love by insuring their future"!

References:

Conron, C. (2019, March 20). 13 Reasons Why People Don't Buy Life Insurance. Retrieved November 23, 2020, from https://lifedesignanalysis.com/blog/post/13-reasons-poeple-dont-buy-life-insurance

Marquand, B., & Marder, A. (2020, August 03). Term vs. Whole Life Insurance: How to Choose. Retrieved November 23, 2020, from https://www.nerdwallet.com/blog/insurance/what-is-the-difference-between-term-whole-life-insurance/

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