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A guaranteed death benefit that won’t decrease (unless cash value has been withdrawn and not repaid at time of death)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 Any cash value that may accumulate in your policy can be withdrawn or borrowed against and used for any purpose (important note: any outstanding loans or partial withdrawals that aren’t paid back will reduce your policy’s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)
