Term Life Insurance vs.
Whole Life Insurance
From United of Omaha Life Insurance Company or Companion Life Insurance Company
Term life insurance and whole life insurance are the two standard forms of life insurance available. Term life coverage lasts through a specified period - often 10, 15, 20 or 30 years. Once this period is over, coverage ends. Whole life insurance is permanent insurance, remains in force, as long as premiums are paid until the death benefit is paid or the maturity date is reached. Whole life insurance also builds cash value, which you can in turn borrow against to use for emergency expenditures and other needs. Generally term life insurance does not build cash value, but has a smaller premium payment than whole life.
The Main Differences
With term life insurance, you are only covered during the lifetime of the policy. If the death benefits have not been paid at the end of the period, they are gone and the coverage ends. However, there are term life insurance options where this is not the case. A term life insurance policy with return of premium feature will refund your premium payments from the policy at the end of the term. This refund is not the same as the investment component of whole life insurance - the payments are not invested and do not accumulate interest during the term.
Whole life insurance requires a higher premium payment. The higher payment goes toward the investment portion of the policy, which is designed to build cash value. This cash value can be borrowed against for various expenditures.
Why Choose Term Life Insurance?
Term life insurance is ideal for someone looking for supplemental or temporary insurance that fits within a budget. Term life insurance premiums can be affordable. We offer you a variety of term life insurance policies to cover your situation. In addition, each of our three term life options (Term Life Express, Term Life Complete and Term Life Answers) offer numerous customizable options to make the plan fit your situation.
Term life insurance can be a cost-effective way to help protect your family. It is often used to help protect families from longer-term financial obligations, such as a mortgage, in the event of a death. Face amounts range from $50,000 to $400,000 or more depending on the type of policy selected and the optional riders attached.
If you are looking to supplement the life insurance from your job, or simply need insurance with an affordable premium, a term life insurance policy can be tailored to meet your needs.
Why Choose Whole Life Insurance?
Whole life insurance has a higher premium than term life insurance, but this additional money goes toward funding the cash value of your policy. With each payment to the policy, you add more money into the investment attached to the policy. This cash value grows throughout the life of the policy.
Whole life insurance is also a safe choice, in that the coverage cannot be canceled as long as the premiums have been paid. If your term life insurance period runs out and you need to reinsure yourself, it may be difficult or more expensive depending on age or health. Your whole life policy will be there to protect your family and their finances as long as you stay current on premium payments.
Which Type is Right for Me?
Every individual situation is different. You can speak with one of our local agents to help determine which of our insurance options may be the best fit for you and your family. They will present you with multiple policies and premium payment options so that you can make an informed decision about your insurance. Find an agent today and get started on your insurance policy decision.
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