It’s time to make a choice, term life insurance or whole life insurance? You may don’t know which one to buy, or you just need more information to help you make the decision. Here are listed differences between term life insurance and whole life insurance, maybe this could be helpful if you are wondering which one to choose.
- Premium Costs
Term life insurances are generally cheaper than whole life insurances since they only provide the coverage for a specified period of time. Although many people prefer term life insurance because of the low cost, there is one thing worth notice that the renewed term life premiums may be more expensive than the permanent ones since the premiums can increase with age upon renewal.
- Coverage Availability
The lasting period of the term life insurances usually varies from one to thirty years. If you want to continue the coverage when the original term expires, you will have to either renew the policy for another term or buy a new policy. Yet some term life insurance policies cannot be renewed at the end of a term, particularly when the policyholder develops a serious illness. Whole life insurances, however, can provide coverage for life as long as the premiums are paid. Besides, whole life insurance seldom requires medical examinations while term life insurance may reject people if they are in poor health conditions.
- Investment Function
Some people would prefer whole life insurances because the whole life insurance has cash value, which can be used as the tool for investment or savings. A part of each premium payment of the whole life insurance can be allocated to the cash value, which may have a growth guarantee. As time passes, the cash value growth may even be able to pay the premiums on the policy. Term life insurances, on the other hand, provide no cash value or annual dividends but only the death benefit.