Comparing Term Life Vs Whole Life Insurance

You may be one of those people who are completely confused about the difference between term and whole life insurance. Well, you're not alone because many people don't fully understand why these two insurance types are different. It is important for you to compare term life vs whole life before deciding on which one is the best for you. They each have their own unique characteristics and offer similar but different benefits.

Term life insurance is focused exclusively on life coverage. It only pays out to your designated beneficiary when you die. Term life can be purchased for any period of time from one to thirty years. On the other hand, whole life insurance combines the benefits of a term policy with investments. These investments are generally made up of bonds, money market certificates and/or stock issues. Over time, the amount of money you have paid into the policy can be borrowed against. Whole life policies come in three different categories: traditional, universal and variable. With both term and life policies, you can expect that your monthly premium payment will never increase.

Because whole life insurance gives you investment options, you will pay more for it. You need to keep in mind, however, that these types of policies are not good investments and you likely could get a better return if you put your money somewhere else. They definitely are not the best choice for retirement income because of their low rate of return. They also are known for their high start up fees and there are generally very large commission costs also. In comparison, term life insurance is more affordable to most people. Premiums start to rise if you purchase it after age 50 and it gradually becomes more expensive. There are many term insurance companies that prohibit anyone over age 65 from purchasing their term policies.

Only you know which type of insurance is the best option for you. Before making a final decision, take the time to look closely at both term life vs whole life insurance. They both have advantages and disadvantages. In any case, one of them is sure to meet your own personal goals and financial needs.

Matt writes more about term life vs whole life insurance at http://www.long-term-insurance-advisor.com/ [http://www.long-term-insurance-advisor.com/longtermcareinsuranceratings.html/]