What to Choose Between Term and Whole Life Insurance

What to Choose Between Term and Whole Life Insurance

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Choosing a suitable life insurance with your condition can be a little bit confusing. This is because not everyone understands how the type of insurance can affect the payment. To start off, you can try to understand the term and whole life insurance.

 

What is in the term life insurance

The term life insurance is only giving you death benefits only. Also, this type of insurance will give you benefits if you are no longer in this world and term of the policy is still in effect. So you won’t get any benefit if you die outside the time of the policy. But, this insurance is the easiest one to get and most affordable compared to the other types. The name ‘term’ itself refers to a specific time period such as 5, 10, or 20 years. The term life insurance will get more expensive if you get older. Once the policy is expired, you have to renew it and do all of the required steps or you can convert it into a whole life insurance. You can use this insurance as a temporary additional coverage along with the permanent life insurance policy.

What is in the whole life insurance

The whole life insurance will cover you for the rest of your life. Because of this, the payment will be more expensive. You have to go through a health examination, but you can skip this step and pay a higher price. To build up a good amount of money, you have to wait for more than 10 years. This insurance is a good choice if you opt for estate planning. During the policy, you can withdraw a portion of the cash value or borrow it. If you use this insurance correctly, it can be more beneficial compared to the term life insurance despite the more expensive payment.

Comparing the two types of insurance

There are several factors that can be used to compare these two insurance such as age, health condition, and value of the policy. The payment fee between the two insurances is clearly different. The term insurance is cheaper but only cover you when you die but the whole life insurance can cover you all the time despite the expensive fee. The term insurance can give you a good amount of money if you use it at the right time. On the other hand, a whole life insurance can pile up cash value after years. After knowing the difference between term and whole life insurance, you should be able to pick the one that suits you.

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