Whole Life Insurance and Term Life Insurance

Life insurance is a very important aspect of one’s financial plan. Everybody wants cheap insurance quotes, but many people do not know how much life insurance they need, or how much is actually sufficient. For example, someone who works under high risk circumstances, like mining or the constructions area, definitely needs death and dismemberment insurance to ensure those who depend on his income will not be suddenly and totally without income and benefits. And this is only one aspect; there are many circumstances that are of benefit as well.

In addition, there is debate about the benefits of whole life insurance versus term life insurance. As its name suggests, whole life insurance offers coverage for as long as the insured lives, while term life insurance offers coverage for only a set number of years (mainly from 5 to 30 years terms).

Whole life insurance offers more flexibility, in the sense that once you have contracted it, and you have been paying for the premiums a good number of years, you have access to the “cash value” which you can actually take out. Plus, many lenders offer loans secured against your whole life insurance.

On the other hand, term life insurance is an option to be undertaken only as a simple protective measure, because the benefits of a term life insurance (money) can only be taken out in the case the insured dies. So, if one has a term life insurance for 20 years, the insured is say 30 years old at the time the insurance was contracted, and the term is up while the insured is still living, there is no benefit whatsoever from the term life insurance to be received. Term life insurance is good option only for those people who have say a family member heavily depending on their income (this could be a single parent with a child under the age of 18 for example). This way, the parent takes all the necessary safety measures, so that in case anything happens to him, the child will get the benefits.

Certainly terms, options and offers differ dramatically from one insurance company to the other. This is why it is very important that you make a thorough research of the existing offers, comparing prices, benefits, conditions you must meet. The market for insurance in general is a very developed, but controversial one, and it may take a prudent person a long time until they the most appropriate product for self and family. During your decision-making process, you may want to consider the following, in order to make it easier for you to shop around for the perfect policy:

  • If you need a good coverage for no more than 15 years, then opt for term life insurance; anything beyond that would make you consider whole life insurance
  • You need to know that there is always the possibility of prolonging the actual “term” of a term life insurance (but it is costly)
  • Whole life insurance = more expensive but very flexible
  • Term life insurance = cheaper but more “rigid”
  • Whole lie insurance = constant premiums (the amount payable for premiums stays the same throughout the contract)
  • Term life insurance = it has “variable “ (increasing) premiums payable most of the times
Before opting for buying insurance online, always make sure you are dealing with a reputable insurance company, and that you can read and comprehend the terms and conditions provided. If you feel insecure just browsing and buying online, then turn to professional advice and contact your local insurance agent who can redirect you towards the best solution.

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