Two of the most common types of life insurance include whole life and term life. To understand which policy is best for you, let’s go over the differences between the two.
Term life insurance only provides coverage for a limited number of years. Common lengths for these policies to last are 10, 20, or 30 years. One of the main reasons to buy a term life policy is so it can provide your beneficiaries with a death benefit if you should pass away while the policy is active.
Since term policies only last for a limited amount of time, they cost less than whole life policies. While this is a good advantage of term life, the policy does have some cons, such as:
Unlike term life insurance, whole life insurance is a permanent life insurance policy that lasts for your entire lifetime. As long as you keep up with your monthly payments, your whole life policy will never end.
Whole life policies also builds cash value over time on a tax-deferred basis. While your beneficiaries will make use of the death benefit after your passing, you will be able to personally access the cash value while you are still living. You can borrow against this cash value for your financial needs, but any amount you take out and don’t pay back will be deducted from the death benefit.
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At American Family Solutions, we understand how important it is for you to get the right coverage. That’s why we are here to help you get the coverage you need to protect your loved ones. To learn more about your term and whole life options, give us a call today!