Whole Life Insurance vs Term Life Insurance! What to Choose?

Life insurance services protect your family in case of unfortunate events that lead to your death. The most common types of insurance are: no exam life insurance, term life insurance and whole life insurance. The first type is usually sought by people who are not eligible for the later ones.  So, if you are not that sick or old the main problem is what to choose between whole life insurance and term life insurance.

Financial insurance-advisorTerm life insurance provides temporary protection and its length is fixed by the insured. You can sign in for 1,5,10, 15, 20 or 30 years coverage. Premiums will be renewed at specified time intervals and they will cost higher each time. Term life insurance is recommended only if you need to accomplish some goals at specific moments in time.

For example, you can purchase a 15 years term life insurance policy if you have 15 years left until retirement. Or you can apply for 10 years term life insurance if you want to send your kid to college after 10 years.  This policy does not have a cash build component and if you outlive the policy, you will receive your money back, minus some administrative costs.

This policy is appreciated because the initial premiums are very cheap, making it the most affordable policy.  Term life also has a flexible payment system and you decide when you pay the premiums.

Whole life insurance is a permanent policy that is kept active for as long as the insured lives and keeps paying the premiums. It has a cash build component and everything you save will grow with a certain interest rate. It is the ideal choice if you want to save lots of money that will be used by the family to compensate for the loss of an income. The main advantage is that the premiums are kept at the same level. So, you will know exactly how much you will have to pay the following month and year.  Whole life insurance is ideal for long term goals.

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