Term vs. Whole Life Insurance: What’s the Difference?

Choosing between term life insurance and whole life insurance can be overwhelming. One may offer simplicity and affordability, while the other may provide lifelong coverage and cash value benefits.

At The agents at Express-Way Insurance & Tax Services, we’re are here to explain the differences between term life and whole life —and help you decide the right policy for your needs and goals.

What Are Term and Whole Life Insurance?

Term insurance is a type of life insurance policy that may provide coverage for a set period, such as 10, 20, 30 or 40 years. If you die during your policy term, your beneficiaries may receivecan submit a claim for the death benefit.

Whole life insurance is a life insurance policy that may include lifelong coverage you until you die or you cease paying your premiums. Aside from a death benefit, your beneficiaries may receive a cash valuepolicies may accrue cash value over time, which may be invested, borrowed against or used to reduce premiums.

What Are the Differences Between the Two?

Here The following are a few differences between a term life and a whole life policy:

• Price—A term life policy is considered generally cheaper than a whole life policy. However, it may be more expensiveyour rates may increase if you want to renew a term life policy once your coverage expires.

• Coverage period—A term life policy may cover you for up to 40 years, while a whole life policy can last a lifetime.

• Benefits—A whole life policy may offer a death benefit and a compounding cash value that you may borrow of or withdraw from. On the other hand, a term life policy may only offer provide a death benefit only after your beneficiaries file a successful claim.

How to Can You Tell Which Policy Is Right for You?

Here are a few factors you may considerConsider the following before deciding on a term or whole life policy:

• Budget—: Term life insurance is usually often recommended tosuitable for those with limited budgets or whose financial obligations may have a projected end date, such as those paying for off a loan or mortgage. On the other hand, a whole life policy may be beneficial if you have more financial flexibility.

• Beneficiaries—: A term life policy may support your beneficiaries until they are able tocan support themselves, while a whole life policy may be recommended if your beneficiary requires long-term care.

• Financial goals—: The compounding cash value of a whole life policy may help you after your retirement. In addition, whole life premiums are fixed, so you don’t have to worry about paying a higher premium if you renew your policyrate as you age.

Contact Express-Way Insurance & Tax Services to learn more or request a personalized quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.