The Difference between Term Life and Whole Life Insurance

On 06.18.11, In General, by admin

If you are uncertain about the differences between term life coverage, and whole life coverage, and your agent confuses you, then you are not alone. Most people truly do not understand the different types of coverage they can buy, and the exact things that coverage will do upon their death, and during their life.
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If you are uncertain about the differences between term life coverage, and whole life coverage, and your agent confuses you, then you are not alone. Most people truly do not understand the different types of coverage they can buy, and the exact things that coverage will do upon their death, and during their life.

In order for you to make a life insurance comparison you have to know a few facts. Term life coverage is the simplest form of coverage you can get. You pay a set amount of money each year, and in return if you die, the company that provides the coverage will pay a set amount of money to your beneficiary. You renew this type of policy every few years, and it has no cash value.

Whole life coverage is more like an investment. When you buy these policies you never need to renew them. You pay a premium every year to the company, and they provide coverage in case of death. These plans will overtime have a cash value that you can borrow money against, or use as collateral for a loan. This type of coverage generally cost more than the term does, but if you get the whole life when you are young the price may be very reasonable.