21 Aug Life Insurance: Which Type is Right for You?
Making the decision to purchase a life insurance policy is a great first step to securing a financial safety net for your loved ones after you pass away. The next step is to decide what type of life insurance policy is right for you. There are several different types, but the main two are term life and whole life. The difference between them is that one is in force for a certain period of time (term) while the other stays in force your entire life (whole life).
Typically, term insurance is purchased by younger adults who may be just starting out with career and/or family life. Term insurance is usually more affordable as it only covers for a specific period of time and does not offer any additional benefits other than the death benefit. A healthy man in his 20’s can get a 20 year $500,000 term life insurance policy for somewhere around $35 per month. Term policies can be written with an endorsement that allows the option of renewing as a whole life policy at the end of the term.
Whole life policies can be purchased at any time, but they are typically bought by adults that are more established financially. The reason they cost a bit more than term policies is that not only do they cover a longer period of time – your whole life- they can build equity that can be borrowed later within the policy period. Some people use whole life policies as investment options as well as having them for the death benefit.
There are variations of whole life policies as well: universal whole life, variable universal, and others can be purchased depending on your lifestyle and financial investment. We can help make your decision a little easier by offering facts about all available life insurance policies. Find out what will work for you and your family.