Whole Life Insurance Or Term Life Insurance? What’s The Difference?

A confusing fact for many people in search of a life insurance policy. Which is the right one for me? Well first before you decide anything let’s go over the difference between the two most popular, term life insurance and whole life insurance. Term life is just your basic life policy and often the most popular. A term policy is life coverage only, on the death of the insured it pays the face amount to the beneficiary named on the policy.

Now whole life is a little different, it’s a combination of term and an investment component. The investment portion could be in bonds, money market accounts or stocks. Basically the policy builds cash value that you can borrow against. Whole life insurance is much more expensive than term because your not only paying for the insurance but aspect but also the investment portion too. The three most common types of whole life are traditional whole life, universal and variable life insurance.

Even though whole life is much more expensive that’s not to say it’s a bad idea. Wealthy people can use a whole life policy in their estate planning by setting up an insurance trust that will pay their estate taxes with the policy proceeds. If your looking for whole life or term life coverage make sure your doing your research on a professional and well respected company to go with.

You want some assurance that the company you choose will be around incase you aren’t. For life insurance companies you can do a quick search on the internet and read thousands of reviews of all the major players in the life insurance game before you decide on a company. Do a quick search and get some standard rates so you can get a feel for what kind of premiums you will be looking at. You can get an instant term life insurance quote by clicking here.