You will definitely hear the terms "whole life" and "term life" when you look into life insurance. It's important to know what these types of life insurance are and what they can do for you and your family before deciding which one to buy.
Lifelong
This kind of life insurance is both a way to protect your life and make money. A cash value builds up in a whole-life policy. Depending on the policy, you can either cash it out or use it as collateral to get a loan.
Is it best to live a whole life?
It does cost more to buy a whole-life policy. You are not only paying for life insurance, but you are also paying for an investment tool. This may add more fees and costs to the policy because of the investments. Also, the return on investments with whole life may not be as high as the return on regular investments. It can be hard to figure out the amount of the premium that goes toward the investment and the return on investment.
Term life insurance
Term life insurance is much easier to understand and is by far the most common type of life insurance. It can be bought for anywhere between one and thirty years. The insured pays a premium, and when they die, the beneficiary gets a set amount.
Is it smart to buy term life?
Term life insurance might be the best choice for a young person or even a middle-aged person who knows what their financial needs would be if they died. The defined benefit makes it easier to make plans for your estate. A person in good health can buy a lot of term life insurance for a reasonable price until they are 50, and sometimes even after that.
There is no one way to choose life insurance that works for everyone. Most families may be better off with term life, but there are times when whole life may be a better choice. Get as many quotes as you can so you can compare prices and services.
