Which is better and why: term or whole life insurance?

Term life insurance is cheaper than whole life. But term life only pays out when you die, whereas whole life can pay out when you die or when you stop making payments for the term of the policy.

While term life is a simple and straightforward way to get coverage for yourself for a period of time, whole life can provide ongoing protection that lasts throughout your whole lifetime.

Term insurance premiums are typically lower than the cost of comparable term policies because term insurance provides only temporary protection during a specified term or policy duration. Term premiums will continue to be adjusted higher as you age so it’s important to consider how long you need coverage when purchasing term insurance. When comparing term versus permanent products remember:-

– Permanent Life Insurance – A type of noncancelable life insurance where the premium remains level over the entire length (term) selected by the insured.- Benefits payable under these policies may last just one year up into old age while still having premiums locked in.

Term Insurance – A type of term life insurance that provides coverage for a specific period or term. It does not accumulate cash value and the policy premium will increase as the insured ages.

Whole Life Insurance – Provides lifetime protection where all premiums, plus interest earned on those premiums, are paid to you (or your estate) if you die within a specified term, regardless of how much has been paid into it.

Cash Value Life Insurance Policy – An arrangement by which part of each premium payment is used to build up cash values inside the policy.– In some cases these policies can also provide benefits under certain conditions other than death such as terminal illness, permanent disability and/or critical care nursing home confinement being just a few examples.-

Universal Life Insurance – A term life insurance policy that combines term and whole-life features. Universal policies will generally cost more than term insurance because they provide lifetime protection while still having premium costs locked in during the term period.