The Difference between Affordable Term Life insurance and Whole Life Insurance

When you start thinking about your life insurance, whether you’re shopping for a new insurance policy or simply reviewing your existing one to update your coverage, reviewing the basic differences between term and whole life coverage with Insurance Quotes Lady is a great place to start.

Affordable term life insurance and quite pricey Whole Life Insurance offer benefits that can be advantageous to a person depending on age, status, financial worth, mortgage status, how long they plan to be insured and many other variables.

It’s best to begin your quest by understanding the advantages and disadvantages of whole life insurance and term life insurance as well as the different characteristics of each.

How Does Whole Life Insurance Works?

The Advantages

· Whole life insurance offers death benefits and more importantly, cash value which is a result of the insurance company’s investment (such as bonds and money-market instruments or stocks) from a fraction of your premium.

· Compared to affordable term life insurance, death benefit and premium with whole life insurance stay constant during the entire coverage period.

· After you settle all outstanding premiums, the policy will stay in shape until the time of death.

The Disadvantages

· Premiums for whole life is a lot expensive than affordable term life insurance.

· You have no way of tracking how much premium goes towards your insurance and how much is actually going towards your savings.

· You can’t influence how the insurance company decides to invest part of your premium. Nowadays with the stock market being unstable, your cash value may also be affected. If you still need further clarification on this you may consult your financial planner in addition to your insurance representative (have them run an internal rate of return and compare it against other investments)

· You might not see any return on your investment for decades to come even if the venture is a sound one.

Other Consideration about Whole Life Insurance

· You are assured of a small return on your investment

· Compared to affordable term life insurance, whole life insurance policy is not always recommended due to its low economic growth. Since your death benefit is based on erratic interest rate, fluctuating during economic changes.

· Designed for people with above income level who can afford to pay the lump amount of the entire life insurance premium.

· People who buy Whole Life Insurance are also usually considering quotes for annuities, disability insurance quotes, long term care insurance quotes, burial insurance quotes, and even cancer insurance quotes.

Affordable Term Life Insurance, its Advantages

· Married couples and individuals under the age of 40 years old prefer affordable term life insurance than Whole life insurance

· Offering its holder flexibility and freedom to decide for how long they want the policy to exist, affordable term life insurance also allows its holder to pay premiums based on the length of its period.

·With affordable term life insurance, you have the choice to renew your policy when you still want to maintain your coverage after the policy matures.

· There is no cash value to receive with affordable term life insurance policy.

· There won’t be any death benefits with affordable term life insurance if you fail to renew your policy on the agreed date after it matured.

The Different Kinds of Affordable term life insurance

· Level Term -This is the most popular kind and also affordable term life insurance wherein death benefits remain constant throughout the policy’s period.

· Decreasing Term -This is the most inexpensive type, the most affordable term life insurance policy where death benefits drop as the policy approaches its maturity period.

Other Considerations – Affordable term life insurance vs. Whole Life Insurance

In choosing between whole life and affordable term life insurance, it’s always important to consider how much coverage you and your family needs and your desired time span, against how much you can afford.

It’s also important to consult your insurance agent with the following questions:

· Do Life Insurance premium vary or stays constant during the policy’s period

· Does affordable term life insurance policy and whole life insurance require you to have a medical examination upon renewal?

· Can you change from whole life policy to affordable term life insurance policy later on?

Discover what type of Life Insurance works best for you. Get your free life insurance quote today!

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