Whole life insurance and term life insurance are two different types of life insurance policies that provide different levels of coverage and have different features.
Whole life insurance, also known as permanent life insurance, provides coverage for the policyholder’s entire lifetime as long as the premiums are paid. It also includes a savings component called cash value, which accumulates over time and can be accessed by the policyholder through loans or withdrawals. Whole life policies have a guaranteed death benefit amount and the premiums remain level throughout the life of the policy.
On the other hand, term life insurance provides coverage for a specific period of time, such as 10, 20, or 30 years. If the policyholder dies within the term of the policy, the death benefit will be paid to the beneficiaries. However, if the policyholder survives the term of the policy, the coverage will expire and there will be no death benefit. Term life policies have lower premium rates as compared to whole life policies.
The main difference between whole life and term life insurance is the length of coverage and the cost. Whole life insurance is more expensive than term life insurance because it includes the savings component and provides coverage for the policyholder’s entire lifetime. Term life insurance is less expensive because it provides coverage for a specific period of time. Additionally, whole life policies can be used as an investment tool, while term life policies are purely for protection.
It’s important to consider your needs and goals when deciding which type of policy to purchase. A financial advisor or insurance agent can help you determine how much coverage you need and how long you need it for, and can also help you compare different policies and rates.
