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The Difference Between Term and Whole Life Insurance

Insurance Whiz — Sat, 31 Oct 2009 23:56:19 +0000

The assumption can be made that there are plenty of people walking around with no idea what the difference between term and whole life insurance is. Many people who look into getting life insurance will think term life insurance. Actually, just as many, if not more will look at buying whole life insurance. The major difference between term life and whole life insurance is one has a set term and the other is considered permanent (having a cash/investing component that can actually be used as a loan). Most of the term life companies offer terms like 10 to 30 years. At the end of the set term, the policy will expire. At this point, get a whole life plan or just renew the term. If you plan to renew, your policy rates will most likely increase.

Term life insurance vs. whole life insurance is a very important piece of a family’s financial portfolio. For most, term life insurance is a building block of comfort. Whole life insurance is the actual foundation. Life insurance allows the family members that are left behind to maintain their lives after a devastating death in the family. It is critical to families that do not have multiple incomes. Beneficiaries have varied needs and at that point, the difference between whole life and term insurance is not very important. For them, knowing that an insurance payout is on its way eases the stress of taking care of their loved one’s burial services and final expenses.

With regard to whole life insurance, some may be unclear on some specifics. When cash values become insufficient, policies lapse. Whole policies build cash value via an investment component, but policy owners need to be sure they understand all of the components that make up the build of their policy. The cash value portion supplements the policyholder’s premiums in the future. If the cash value is taken for whatever purpose and the policy holder decides to or does not have time to replace it, at some point they are going to need funding added to keep the policy active.

The bottom line is that the difference between term and whole life insurance is pretty straightforward. Both can offer good protection for your family if you pass on. It is up to you as to which policy you should buy. Ultimately, make your premium payments so that your policy stays active. Either insurance policy is going to pay benefits to the surviving beneficiary when the policyholder dies. Each of these types of insurance will take care of the ones you leave behind as long as it is in force at that time. Life insurance is significant to your financial package. Always check into the policy face value options that are available. Never forget that there are people or even a person that you love depending on you if you should die. If you leave them without the benefits from your life insurance, it may be like watching a sinking ship. Do not wait; decide and purchase a policy that fits your family protection plan.

Whole Life Vs. Term Life

Insurance Whiz — Mon, 19 Oct 2009 20:52:14 +0000

Deciding between whole life vs. term life insurance can often be a difficult choice when creating a protection plan for your family. Term life insurance provides protection at a fixed amount of payment during a predetermined amount of time (the term). Afterward, the policy expires and payments are no longer guaranteed. Whole life insurance combines a term component with an investment component that can be borrowed against.

For most, term life insurance is a building block of comfort and peace of mind . Whole life insurance can sometimes be costlier but add up in value over time. Life insurance allows the family members that are left behind to sustain their means in the event of death. It is especially important to families where there is only one income. If the head of household should pass on, the benefit from that coverage could be vital. Beneficiaries often use the term or whole life insurance payout to handle the deceased individual’s final expenses or to set-up a college fund for their children.

Many people who look into purchasing life insurance will consider term life insurance vs. whole life insurance. Term vs. whole life insurance is set for a certain term. Most companies offer terms of 10, 20, or 30 years. While the policy is in force, if the insured dies, the listed beneficiary or beneficiaries will be paid the policy’s value. At the end of the 10-year term or other specified term, the policy will expire. At this point, there is the option of renewal or looking at getting a whole life plan. Unfortunately, many that are term life policyholders find that their policies have reached their term’s end.

Whole policy owners have to be diligent in knowing their policies, also. Often, their policies lapse due to cash values that are insufficient. There are some common misconceptions when it comes to whole life insurance. These policies do have cash value, but policy owners often think that value is not significant when it comes to the actual components of the policy itself. In reality, the cash value piece is a necessity in order to supplement the policy owner’s premium installments in future years. If the owner takes the value out to spend for whatever use, neglects to replace it, they will need to provide more funds in order to keep the policy in force. Cash value is a nice benefit to these particular policies, but it should not weigh very heavily when you are considering what policy to buy.

To be honest, the choice is totally up to you as to whether you should buy whole life vs. term life. The most important factor is to make sure that whatever policy you choose policy stays current and active. Any life insurance policy will pay its benefits to the surviving named beneficiary should the insured die. The two standard types of life insurance, term and whole, will each provide for your loved ones if the policy is active at the time of passing. It is definitely one of the most significant coverage options an individual can have to protect their family. Always remember that you have others relying on you even after you are no longer here. The sudden loss of that income provider can mean a significant change in lifestyle for those that were being supported. Be proactive; decide which type of policy is right for you and them.

Whole Life Insurance Rates

Insurance Whiz — Sat, 17 Oct 2009 13:40:52 +0000

There are many different types of insurance and researching whole life insurance rates can help one to make an informed decision on which type to buy. With Term Life and Whole Life as the two most popular types of life insurance available, some information on the differences can be valuable.

Whole Life is insurance that pays a predetermined amount to the beneficiary upon death. There are different options available for premium amounts and different methods to determine payment structures. The first of these is a policy which accrues a cash value. With this type of policy, one can borrow against the proceeds after a certain amount of premiums have been paid. This money must be paid back, but if it is not, then the amount of the proceeds upon death is lessened. There are also tax benefits to this type of borrowing.

The standard type is premiums that stay the same throughout the life of the policy, however there are exceptions to that. One of these is a lump sum premium. This is a situation in which the insured pays a large lump sum at the beginning of the policy and the premium payments are less over the years. The whole life insurance rates and the amount of the lump sum payment and the premium amounts are clearly delineated at the beginning of the policy. The purchaser decides how much lump sum payment to make based on personal factors at the time.

A whole life policy can never be canceled as long as the insured makes the premium payments as required. No health issue or age issue can lessen the benefits paid upon the insured’s death. This guarantee can become very valuable over a lifetime. Another benefit of a whole life insurance policy is that the purchaser can purchase a relatively cheap rider that will double the benefits paid upon death if said death is caused by an accident.

It is a very practical idea to do comparison shopping. Whole Life insurance rates vary greatly by company and by benefit provision. Doing the research and determining the best fit for each unique situation can best be discussed and decided with a knowledgeable insurance professional.