Purchasing Life insurance is at secure way to provide for your family financially should you die unexpectedly. Deciphering the difference between term and permanent life insurance policies is necessary in order for you to choose the type of protection that serves your situation best. Term life insurance is the cheaper option. The term of the life insurance is set for a certain period of time that you choose, anywhere between one and 30 years, with the most common option being the 20 year term. With this policy, you will list your beneficiaries who will receive the death benefit as long as your death meets the specified requirements. The coverage is valid for certain term, and when it ends, you can pay to extend it. The plan has no cash value and cannot be borrowed against. On the other hand, whole life insurance is a combination of a life insurance policy and a cash value investment. While more expensive than a term policy, your payments towards a whole life insurance plan contribute towards an accumulating cash value that you can borrow from. The policy is good for your entire life. It does not terminate until you either die or cancel the policy.
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Term vs Whole Life Insurance: Here’s How to Choose