Whole Life Insurance or Term Life Insurance: What Should You Buy?

couple-MedicareTerm Life Insurance and Whole Life Insurance: both offer valuable protection, but each has different features. Which one would be right for you, you may ask yourself. There are benefits to retaining your term policy, but many people enjoy added protection and are checking out whole life insurance quotes.

Term life insurance is designed to help people purchase the protection they need when they cannot afford to purchase permanent life insurance or when they only need coverage for a specific period of time. Term life insurance has a guaranteed death benefit but no cash value and the premiums will increase at pre-determined intervals such as after 1 year, 5 years, 10 years or 20 years, depending on the kind of policy you purchase.

It is also very often the product of choice when protection needs may be high for a period of time, such as when your family is growing. Term life insurance can also be an effective way to supplement permanent insurance during high-need years, such as when family and other financial responsibilities are outpacing income.

Whole life insurance provides life-long insurance protection. Once you have been approved for the coverage, your policy cannot be canceled by the carrier as long as premiums are paid when due. Regardless of your health, the insurance will remain in force. Whole life insurance builds guaranteed cash value, provided premiums are paid.

This amount can be used in the future for any purpose you wish via a policy loan. If you like, you can borrow cash value for a down payment on a home, to help pay for your children’s education or to provide income for your retirement. The guaranteed cash value can be increased by dividends when declared by the company.

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