Learn the difference between whole life and term life insurance.
If you’re looking for life insurance, then you probably know that there are whole life and term life policies. But how do you know which policy is right for you? Here are some pros and cons of each type of policy to help you make an informed decision.
Whole Life Insurance
Whole life insurance is essentially life insurance that never expires. This means that, as long as you continue to pay your premiums, your beneficiaries will receive compensation when you die. Additionally, these types of policies have a cash value component that increases (or decreases) over time. This cash value aspect allows you to borrow against your life insurance policy.
- Pros: In some cases, whole life insurance policies can be a good investment. Additionally, you never have to worry about your coverage expiring with these policies.
- Cons: Whole life policies tend to be more expensive, more complicated, and more risky than term life policies. Additionally, because the cash value of your policy can actually decrease over time, they aren’t always a good financial investment.
Term Life Insurance
Term life insurance is what most people envision when they think about life insurance. Essentially, you choose a term length (normally 10-30 years) during which you pay your premiums. If you pass away during your term, then your insurance provider will provide compensation to your beneficiaries. However, if you pass after your term has expired, then your insurer has no coverage obligations.
- Pros: Term life policies are generally more affordable and easier to understand than whole life policies. Additionally, you do not have to worry about risks, hidden fees, or exclusions.
- Cons: Your coverage has an expiration date. If you still need coverage after your term ends, you will have to shop around for a new policy.
Ultimately, choosing the right life insurance policy depends on your individual needs and circumstances. Whether you decide on a whole life or term life policy, it’s important to have the right insurance professionals on your side. To speak to a team you can trust, contact the experts at The Schwab Agency in Colleyville, Texas. We are ready to assist you with all your insurance needs.