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I've had a lot of folks ask me what the real difference is between Term And Whole Life Insurance And which they should buy As much as I like to help, the best that I can really do is explain the difference between the two and the pro's and con's of each type of policy. This way, the consumer, to know what you're getting before you buy. Whole life insurance covers you for life, as long as your policy remains in good standing. You'll have insurance coverage until the age of one hundred or until you die, whichever occurs first. Some of the pro's of a Whole Life Insurance policy are you'll have a built in savings plan. It works like this. Some of your premium goes to buy life insurance, while the remainder is placed into a savings account that will accumulate interest. You may borrow against this account if you need to, but you must repay the loan. This gives you a bit of piece of mind in case of unexpected vehicle repairs, hospital stays, ect. or any other of lifes little emergencies. Some of the cons of Whole Life Insurance is that it's not cheap. The premium payments for a whole life policy willbe significantly higher than a Term Life policy would be. Another concern is that as you get older the savings account feature won't accumulate nearly as much. For a younger person or couple, this makes more sense because they have their entire lives ahead of them, but for someone middle aged or above, I'd seriously look at Term instead. Term Life Insurance is just exactly what it says it is, "Term". This means that you are covered for a certain time frame or a Term. You could buy a Recurring Term, "20 Year Term", Guaranteed Term, ect. Do you understand? A Term Life Policy is also known as "pure life insurance" because that's all you're buying. Some of the "cons" or differences between Term and Whole life are, unlike Whole Life policies, there's no savings account that accumulates or to borrow against. You are simply paying for insurance. Another con is that, as stated above, Certain Term policies such as Guaranteed Term, can be rolled over, but that's another story. You can learn more at my website. Most Term policies Only last a specified period of time. An example of how this can be used would be for the "breadwinner" of the household who is middle aged, the kids are grown, but still in college, he or she has been paying on their major assets, like their home, ect. for several years and they need some security to make certain that if anything happened, everything would be taken care so that the family could go on without any issues, other than the loss of their loved one. A 10 or 20 Year Term Policy might be a good option for the fictional example above, depending on their specific circumstances My hopes are, you understand now why it's difficult to give specific advice to people without knowing their specific circumstances. Just learning the differences between these two more popular types of insurance policies should help you immensely in the future. Best of luck!
Article Source: http://www.financemanual.com
Joe Stewart is a former Life & Disability agent. He's made understanding life insurance simple for consumers. You can read detailed explanations about life insurance at his website TheLifeInsuranceGuys.com or by clicking on Free Life Insurance Quote
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