The Differences Between Whole and Term Life Insurance
By: Fabiola Grosshan
Submitted: 2010-07-08 02:05:29 | Word Count: 368
If you’re trying to choose between whole and term life insurance, it might be a helpful idea to compare the decision to buying a house versus renting an apartment. Whole life insurance is more like buying a house. It will cost more in the long term, but over time the value of the policy (like the property value) will increase. You can use the dividends to offset premiums and take advantage of other features to offset the cost until the policy is paid up, at which point no more premiums are due and the cash value will continue to accrue value, just like how a home’s equity increases. These are important things to think about as you gather life insurance quotes and consider all your options.
Term life insurance is more like renting a house or apartment because you have to keep paying the same premium amount until the policy expires and at the end of the term, if you’re still alive, you have nothing to show for all those payments. The payments for term life insurance may be much lower than the initial payments for whole insurance, but the policy will not increase in value, and the payments will never stop until the policy has expired. Whole life insurance policyholders, like homeowners, also get some investment benefits as well as some tax breaks.
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There are qualified experts that can provide you with life insurance quotes and more information about both of these types of policies. It would be wise to get information and quotes from an unbiased third party, however, rather than talking to a broker or agent who represents one specific life insurance company and is paid on commission. This is an important decision that will require a lot of thought in terms of the amounts of coverage and the policy details that will work best for you. Just remember, though, that some type of whole life insurance policy will probably be a much better option in the long term.
