Learn which type of life insurance is right for you.
If you are looking at life insurance, then you know that there are whole life and term life policies. But what are the differences between each type and how do you choose the right life insurance for your needs? Use this information to learn more about whole life and term life insurance and what each could do for you.
As the name indicates, whole life insurance covers you for your entire life. Because you have a longer coverage term, your premiums are generally higher than a term life plan’s. You also have higher payments with a whole life plan because a whole life insurance plan actually accumulates value over time. Because they grow in value, whole life insurance plans can be incorporated in retirement planning and they offer you the ability to borrow against your policy.
Term life policies are what people normally envision when they think about life insurance. Essentially, when you buy a policy, you set a coverage period (10, 20, 30 years and so on). After your terms runs out, you have the option to renew your policy. These policies do not accumulate cash value, meaning that if you die, your beneficiaries will receive the predetermined benefit. However, if you die without renewing your policy, then your company has no coverage obligation. This is why term life policies are generally cheaper that whole life. These policies are ideal for meeting your temporary needs such as repaying current debts in case you suddenly pass.
Which is right for me?
This depends on your needs. Many people choose term life policies because of the lower premiums. Additionally, many people favor term life because they can set their term for the period of time in which they are paying major debts like college loans or mortgage payments. However, other people like the idea of a whole life insurance plan that will not expire and that will build up cash value as they have it. While more expensive, some people see whole life as a better investment.
Whether you choose a term life or a whole life policy, getting the right life insurance coverage is an important part of supporting your loved ones in the wake of your passing. To find the right life insurance to fit your needs, contact the experts at Patterson & Associates Insurance in Richardson, Texas. Our dedicated professionals are ready to assist you with all your insurance needs.