Term vs Whole Life Insurance: Which is Right for You?
What are the differences in Term vs Whole Life Insurance, and how can you know which is right for you? We’ve got the details for you here.
Isn’t it shocking to think that most people have no life insurance coverage at all? Sadly, this statistic speaks the truth.
Many people believe that having life insurance is expensive. In reality, protecting your loved ones only comes with a small cost that people can afford.
Term vs whole life insurance is a constant debate.
The type of life insurance plan you purchase varies for people living with certain health conditions.
Read on to learn more information about the pros and cons to choosing between term vs whole life insurance.
Why Do I Need Life Insurance?
Let’s start by asking this question: why do you need life insurance anyway? There are many reasons why a person is likely to consider the term vs whole life insurance plan. You may need to purchase a life insurance policy in this day in age.
Are you a parent with young children? It may be a good idea to purchase a term life insurance plan to protect them just in case of an emergency where you unexpectedly pass away.
You wouldn’t want your children, who depend on your current income to survive, to be left without anything to keep them living on without you, right?
Not everyone needs to buy life insurance. In the term vs whole life insurance debate, sometimes not buying either plan is right for you and your family.
If you are someone who is already living at the retirement age, then you do not need life insurance. It’s also important to realize that if you do not have young children who depend on your income to live, then you also don’t need life insurance of any kind.
In another scenario, if you have enough assets to protect and cover the people you love once you die then you do not need to take out a life insurance policy. Your dependents will use the remaining assets that you give them access to once you write a documented will that includes them as beneficiaries.
Term vs Whole Life Insurance Pricing
Term Life Insurance Cost and Benefits
Cost plays a major role in choosing the right type of life insurance plan for you and your family. Life insurance has a purpose to reestablish lost income once a person dies, which can be a confusing topic to understand for most people.
If someone you care about needs your salary to continue living a prosperous life, then life insurance becomes an essential plan to invest your money in.
It comes down to choosing term vs whole life insurance in this situation. Let’s discuss term life insurance.
Term life insurance is known as a cheaper option that more people are easily able to afford to pay for. If the term runs out, you can also renew the policy to extend the length of time that the policy covers.
Once you purchase a term life insurance policy, the policyholder has a 10, 20 and 30 year period of time to pay out to beneficiaries.
When a person dies while the policy is active, then the death benefit is collected by the right beneficiaries. The term life insurance policy is a cheaper alternative to whole life insurance because once the death benefit is collected, there is nothing left for the insurer to owe you.
Term life insurance is a great temporary way to protect your current assets.
As a tip, you should be gaining wealth in other areas so you don’t need to depend on the defined length of time associated with your term insurance for payouts.
You should consider investing the rest of the money you have in order to protect your loved ones in other ways, too. Investing your money in the stock market or keeping money in the form of an RRSP account is crucial to maintaining the value of your important financial assets.
Whole Life Insurance Cost and Benefits
On the other hand, whole life insurance is quite expensive. As the name states, it will protect you for the duration of your whole entire life. The premiums associated with whole life insurance are significantly higher in comparison to term life insurance premiums.
The whole life insurance plan is not only a method to financially protect your family, but it also includes a bonus investment. Cash value is also part of having whole life insurance policies in your name.
If you need to withdraw funds throughout the course of your life, you can get these funds from your whole life insurance policy.
The Cons of Whole Life Insurance
Whole life insurance policies are often pricey to undertake. They also last for the entire lifespan of a policyholder, which can be extremely costly. The premiums can be high and you need to make sure you are buying the policy from a trusted insurance company.
If you do not have millions of dollars sitting in the bank, consider a term life insurance plan instead of whole life insurance for better financial benefits in the long run.
In one example where a whole life insurance policy makes sense is if a loved one depends on a pension and the pension money stops. Then, the whole life insurance permanent policy protection will make up for that lost income and provide assistance to the person in need.
Do You Need an Insurance Quote?
We hope our term vs whole life insurance article details the difference between the two major types of life insurance policies offered to clients through our business.
Our team at Insurdinary can assist you in the insurance policy process. We understand how important life insurance can be to protect your loved ones once you are no longer around to support them financially.
At Insurdinary, we are professionals who know that risk is everywhere. We want you to live your life to the fullest knowing that your life is protected and your loved ones will be taken care of no matter what happens down the road.
At our globally recognized accredited business, we offer a wide range of insurance options for you to choose from, which include property insurance, stock insurance, pet insurance, travel insurance, motorcycle insurance and above all, life insurance.