Whole Life Insurance vs Term Life Insurance - Which Is Better?  

Whole Life Insurance vs Term Life Insurance - Which Is Better?

When you are looking to invest in the future for your loved ones, there is a great deal that needs to be thought out. One thing that you must consider in terms of caring for your dependents is life insurance; there are many facets to this problem that must be thoroughly thought out. As you shop for life insurance, one question that you will routinely face is the question of which is better, whole life insurance vs term insurance?

This question is a very important one to ask, and simply put, there is no one right answer for everyone; if there were, there would hardly be a choice! Both of them have aspects that recommend them, and the only way to make a good decision between the two is to find out all the facts.

Term life insurance is a policy where there is only life insurance coverage. Upon the death of the individual insured, the value of the policy is paid to the beneficiary. Contrast this to a whole life insurance policy, where there is the added benefit of an investment. The later builds up cash value that can be borrowed against. While term life insurance is less expensive, you can also see that it is less versatile.

One of the main emphases of whole life insurance is what agents like to advertise as forced savings. Whole life insurances are often pushed as a way to plan for retirement. The investment will yield dividends that can be spent in the person's lifetime.

There is also the question of what kind of policy is available for you at any given time. Term life insurance is widely available up until you are in your fifties or sixties. Term life insurance up until this point is relatively cheap and easy to find. As you get older, however, you will find that the insurance companies prefer to try to sell you whole life insurance. While this does not mean that younger individuals cannot get whole life insurance, or that older individuals cannot receive term life insurance, it does give you something to think about in terms of availability.

The biggest effect that term versus whole life insurance will have on you is the cost. Term life insurance, with it's simple structure is invariably the cheaper option, but depending on your situation, whole life insurance can be a benefit to you and your family. Keep in mind that whole life insurance in an investment and as such, needs to be thoroughly checked out before you put your money into it. Check on what the yield of your investment will be after all charges have been figured. As you take a look at the policies available, remember to check the ratings of the companies you are considering.

When making a decision as important as deciding on your life insurance, make sure you go into it with both eyes open! Do your research and find out which policy will work best for you.


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