Life insurance is important to have so that in the event of one’s death, their surviving dependents will be taken care of financially. A lot of is available about insurance, making it easier for someone to decide whether or not they want term or whole life insurance.
Why Choose Whole Life Insurance?
A whole life insurance policy is also referred to as “Permanent Protection,” because once an individual purchases this type of protection it will cover them for the rest of their life. The premiums that must be paid in order to keep this insurance will never go up in price.
Whole life insurance offers more coverage than term life insurance. Unlike term insurance, whole life insurance comes with cash value, which refers to the amount of savings banked over the years by the policyholder. If they find themselves needing money quickly they can borrow it from their cash value without paying it back. However, any cash taken will make a dent in the death benefits the policyholder would have had.
Why Choose Term Life Insurance?
Term life insurance is the most common type and most adults have it. Since it is such a popular choice there are countless companies out there offering this type of insurance to individuals, making it a very competitive field. This makes it easier to get an affordable rate because insurance companies know what stiff competition they have. Term life insurance is the best way to get the coverage while paying the smallest amount possible to get it. A term insurance policy lasts anywhere from 10 to 30 years, depending on the plan an individual chooses.
Term life insurance is very beneficial to young people who have recently graduated from college and are beginning their careers. It is easier for them acquire term life insurance than whole life insurance because the individual needs a significant income to purchase whole life insurance and most recent college graduates do not have that yet. When a young person needs to provide for a spouse or children, they cover them cheaper with term life insurance rather than whole insurance. Another reason to choose term life insurance is if an individual is only looking for insurance coverage for a credit line or a mortgage.
Term Life Insurance Is Beneficial To Business Owners A business owner can insure their partner with term life insurance so that if their business partner passes away, they are protected financially.
Large Corporations Benefit From Term Life Insurance Large corporations often take out a term life insurance policy on high-level employees that play a crucial role in the company. This ensures that if one of them passes away unexpectedly, the daily operations and cash flow of the company will remain in tact.
Whole Life Insurance Helps Avoid Taxes Many people will choose whole life insurance because their beneficiaries do not have to pay taxes on the insurance payout.
The choice of whole or term life insurance depends on the needs of the policyholder.
AUTHOR Derek Sall
Derek has a Bachelor's degree in Finance and a Master's in Business. As a finance manager in the corporate world, he regularly identified and solved problems at the C-suite level. Today, Derek isn't interested in helping big companies. Instead, he's helping individuals win financially--one email, one article, one person at a time.