The Difference Between Whole Life and Term Life Insurance

When it comes to life insurance, there are two main types to consider: whole life and term insurance.

While both types of insurance provide coverage for the policyholder in the event of their passing, there are some key differences between the two.

Whole life insurance, also known as permanent insurance, provides coverage for the policyholder's entire life. This type of insurance also has a savings component that builds cash value over time, which can be used as a source of savings or investment. Additionally, the premium for whole life insurance is typically higher than term insurance but remains level for the life of the policy.

Term insurance, on the other hand, provides coverage for a specific period of time, such as 10, 20 or 30 years. The premium for term insurance is typically lower than whole life insurance, but it increases as the policyholder gets older. This type of insurance does not have a savings component, it is designed to provide coverage for a specific period of time.

In conclusion, whole life insurance is best for those who want lifelong coverage, and for those who want to use their policy as a savings or investment tool. While term insurance is best for those who want coverage for a specific period of time and for those who want to keep their premium costs low. It's important to consider your specific needs and goals when choosing between whole life and term insurance.