Term or Whole Life?

Which type of life insurance is best for you? Term or permanent, the latter shorthand for whole life insurance. Consider the following:

Is Term Life not Permanent?

Term life is insurance that lasts for a stated term. While many term life policies must be renewed annually with premium costs escalating over time, some now have terms of five, 10 or more years. Whole life insurance premiums stay level for as long as you own the policy and pay premiums on time.

Is Term Life Less Expensive than Whole Life?

Initial costs are higher for whole life, but term life insurance premiums increase as you age, prohibitively at older ages. Whole life insurance premiums stay level from beginning to end. If you buy whole life when young, you’ll likely pay significantly less than a term policy would cost over your lifetime.

So Why Would I Buy Term Life?

If you can’t afford whole life insurance, term life is a good choice. Look for one that allows you to convert to permanent life insurance without the need for underwriting when you can afford more.

What Is Underwriting?

The issuing insurance company will ask you to fill out a medical questionnaire or require a medical exam for higher amounts.

Why Would I Buy Whole Life?

Whole life offers something term life doesn’t: cash value*. Over time, this cash value builds for you to use however you like, including taking out a loan on the amount and paying premiums with it.

So Is Whole Life Always the Right Choice?

Life insurance of some type is always the right choice to provide a financial benefit to protect loved ones. If you have a temporary life insurance need or money is tight, term life will still provide this important protection.

*Applications for life insurance are subject to underwriting. No insurance coverage exists unless a policy is issued and the required premium to put it in force is paid. Life insurance is subject to exclusions, limitations and terms for keeping it in force. Loans and withdrawals from a policy will reduce its cash value and death benefit and increase the chance that the policy may lapse.