The Most Prominent Differences Between Term Life Insurance and Whole Life Insurance
Life insurance is a confusing subject and hard to understand for a layman. That is why we have provided information which will help you understand it and take maximum advance from it. To start, there are two main categories of life insurance. They are called Term Life Insurance and Whole Life Insurance. There are a lot of similarities between them both. Therefore, people often make the error of mistaking one for the other. Such errors can be quite costly when there is a lot of money involved. That is why you need this information, so you can make informed decisions and buy the best insurance.
Impact of Life Insurance
When you finally convince yourself, you need a life insurance, next step is to decide which policy is suitable. You need proper information and knowledge about their distinguishing features before making such a momentous decision. Life insurance is a flexible and powerful financial tool. Therefore, you can use it to build financial assets for yourself or leave a legacy for the descendants.
To better understand the differences between Term Life Insurance and Whole Life Insurance, you need to understand their features first.
Important Features of Term Life Insurance
A Term Life Coverage has many features. The most important among them are;
- It provides death benefits only. There is no component for building cash value and use it as an investment opportunity in it.
- It gives a payout to your beneficiaries only in case of your death within the agreed term of policy.
- This life insurance policy is the easiest to obtain and afford for people with average income.
- There are specific terms in this policy. You can buy it for 5, 10, 15, 30 or similar term of time period.
- This policy becomes increasingly expensive for those above 50 years of age.
- The policy expires when agreed term reaches its end. However, it can be renewed if you want an extended coverage.
- The buyer has the option of buying it as an additional coverage on top of a whole life insurance policy.
- If you wish, this policy can be converted to a whole life coverage policy.
Important Features of Whole Life Insurance
A Whole Life Insurance also carries many unique features. The most important among them are;
- It is a type of permanent life insurance. Which means, it provides you coverage for life.
- It provides the death benefits similar to a Term Life Coverage. However, it also provides the opportunity for cash value accumulation. Hence, it can be used as a sound form of investment.
- Most policy providers require you to take a medical health examination before providing you with this policy.
- It can take 12 to 15 years to build a decent amount of cash value.
- You can utilize the assets for estate planning.
- The return on investments builds the Cash Value.
- You have authorization to withdraw a portion of the cash value from the policy funds.
- It has considerably larger premiums compared to a Term Life Insurance in the beginning. However, the gains from Whole Life Coverage policy are equally gratifying.
Read more Articles About Term Life Insurance and Whole Life Insurance:1) Best Term Life Insurance Providers in 2020
2) All You Need to Know About Whole Life Insurance Policy
3) Does Your Retirement Plan Include Life Insurance?
4) How to Use Life Insurance as a Smart Investment?
5) Effects of Corona virus on Term Life Insurance
Choose the Best Life Insurance Policy for the Benefit of Yourself and Your Family
SG Financial Inc. is one of the best providers of Term Life Insurance and Whole Life Insurance Services in Texas. As a result, our extensive experience allows the policyholders to receive maximum advantages and privileges. You can ensure your children and beneficiaries receive a plentiful future through us. We can tailor cut a policy to suit your needs. Consequently, every characteristic is subject to your criteria and your full approval. Once you have bought a policy, you can rest assured your retirement will be the easy and comfortable.