Term Insurance Vs Whole Life – Choosing the Best For You
Term insurance vs. whole life being shown side by side will quickly show the significant differences between the two. The investment known as a whole life policy is called whole life because it is something that can be used and will last, throughout your entire life. Life needs change and some people do not need to consider life insurance as an investment, so they will choose term life, which covers a specific time period.
When looking at the cost of whole life versus that of term life it may seem like an easy choice, but being informed about the facts and the variety of differences will show why the price is so different. As your whole life policy increases in value, building equity, you can take a loan or cash out of it. Since there is not set time period for it to expire, the financial asset is always a reality.
Vehicle, mortgage and accident or disability type insurance is quite similar to term insurance. When an event occurs, term life pays. In the case of term life the only qualifying event is death, so the designated beneficiaries would have the money when you die during the term period that you paid for. When a family is surviving off a single income it is crucial for an insurance policy that will give them financial stability in case of the death of the income earner.
Whole life policies and term life policies have an 8 %to 10% difference in cost with the term life policy possibly increasing while the whole life policy will remain at or near a fixed rate. Age is a deciding factor for term insurance rate changes. Percentage increases may also be affected by how long you hold your term policy. Annually renewable policies, those that are reviewed yearly, are these types of policies.
Just because a policy is a term life policy, does not necessarily mean that the older you get the higher the price will go. Term life policies are important when families have a lot of debts to pay, but not much in the way of assets to pay them with, this changes as financial needs change. A whole life policy is different, as it is an asset that you are investing in throughout your life. Real estate purchases being some of the more important investments in your life can be secure with either insurance choice in the event of your death.
Contacting a financial adviser is a wise choice when looking at term and whole life policies. Knowing the facts and having good information is important because there are such distinct advantages associated with each product.
Insurance companies offer a variety of policies and the agents selling them will have their own reasons for sharing product information with you. Commission based policies can be sold, sometimes, simply based on how much money the agent will make off of the policy. Taking your time and doing the comparisons will assure that you have made a life long, financially solid decision.
Many options are going to be available to you when you compare term insurance vs. whole life insurance. The choice will continue once you have decided on term or whole life as each offers a variety of unique aspects that will be a part of your over all investment package.
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