Whole Life Insurance or Term Life Insurance - Which One Should You Choose?

March 1, 2011 - PRLog -- Whole life insurance and term life insurance are not synonymous, and can be confusing terms until you understand what these types of insurance are.

First of all, whole life insurance is exactly as it sounds. It is something that you can get for your whole life. Whereas, term life insurance is something that you get for a specified term.

Whole life insurance ensures that you can get money back from all the years of paying into premiums. With some of these policies, you may pay into them for the rest of your life without a huge increase in the premiums as you age. Some other policies may require that you pay into them for a pre-determined number of years, and then you do not have to continue to pay into them once you reach that time. This kind of insurance is very helpful when wanting to supplement an aging spouse's income upon your death.
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It is often considered more expensive, and that may be true in the here and now. However, some people look at it as an investment. It can be reassuring to know that the policy does not expire during your lifetime, that there is no need to reapply for life insurance, and that your premiums do not increase substantially as you age.

If you are looking into this kind of insurance, be sure that you are serious and can stick with it for the long-term. It is not unusual for people to start out with the policy, only to cancel it a couple years in.

In contrast, term life insurance means that your insurance is in effect for a term. The premiums you pay into are often lower when you are young, but the premiums you pay are gone forever. The only way your beneficiary gets any money back is if you die during the time that the term is in effect.

Unfortunately, these premiums do increase substantially as you age. However, because this insurance is less expensive when you are younger, it can be a popular choice of insurance. It can protect your family, wife, and/or dependents, should you die you are your family is reliant on your income. It can ensure that your family is not left destitute if something happens to you before your time. This may mean being able to ensure that your family's mortgage and other debt is paid off, as well as ensuring a promising future for your children, even though you are no longer to provide for them financially.

In conclusion, both types of insurance are similar in that they both provide protection should you ever die and need to provide for your family after your death. However, they are still very different kinds of policies, both with advantages and disadvantages. You just need to figure out which policy meets your needs best.

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