When it comes to the life insurance "term / whole" debate, how will you know what type of life insurance to get? Although the array of terms can be daunting and even overwhelming at times, we will help you sort out the debate and pick the right type of insurance for your needs.
The life term / whole argument centers around personal needs and more of a debate over which type is right for each individual than it is an argument about whether everyone should choose one type versus the other. The fact is that your own circumstances will change as you age, and that term may have certain advantages sometimes, while whole will be preferable at others.
Term insurance is the simplest form of life insurance. You buy a term policy for a set period of time (usually 5, 10, 20 or 30 years), which makes term cheaper and therefore useful for short-term financial goals such as paying home loans or sending the kids of to college. Plus, you can take the money that you otherwise might have spent on a more expensive whole life policy and invest it in stocks and other growth ventures. Hence the old "buy term and invest the difference" adage. However, you might also consider a whole life policy. Here's why.
A whole life insurance policy offers you permanent protection as well as the ability to invest in cash value ventures that can grow - tax-deferred - at alluring interest rates. With whole life, you get the promise of a death benefit no matter when you die, whereas a term policy will expire eventually. Also, there are whole life policies that let you lower and raise your premiums and coverage levels more flexibly than term life plans. Of course, whole life tends to cost more - but you can actually get money back with it. Learn more about whole and term life on our site to find out which type fits your needs best.