What is the difference between term and whole life insurance?

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You may have heard of term and whole life insurance but weren’t sure how they differ. Here’s a quick look.
A basic term life policy offers:
  • The flexibility to select the length of the available policy term that you desire
  • A more affordable option compared to whole life insurance
  • A level premium and death benefit for the length of the term
  • The option of renewing coverage when your term ends (typically resulting in a higher premium and possibly a reduced face amount) 2superscript
A basic whole life policy offers:
  • Coverage for your whole life (as long as premiums are timely made, your policy will not expire)
  • Level premiums that won’t increase
  • A guaranteed death benefit that won’t decrease (unless cash value has been withdrawn and not repaid at time of death)
  • The potential to build cash value over time
  • The living benefit of cash value. Any cash value that may accumulate in your policy can be withdrawn or borrowed against and used for any purpose (important note: any outstanding loans or partial withdrawals that aren’t paid back will reduce your policy’s death benefit)

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