When the business of life insurance began in 1759 in Philadelphia to help Presbyterian widows and orphans, there were no confusions or differences between term life insurance vs whole life insurance. Today, once you start looking for life insurance, all of the terms, rates, percentages, and explanations can get very confusing.
And it’s for this reason that only 59 percent of Americans are life insurance policyholders. But studies show that 84 percent of Americans acknowledge that most people need it.
Cut through all of that confusion right here by learning the key differences between term life vs whole life insurance, and lock in your family’s future today.
Term Life Insurance vs Whole Life Insurance
Once you fully understand the difference between term life insurance vs whole life insurance, you will feel more comfortable about purchasing it. And the process is not as confusing as you might think.
One reason that so many Americans give up on life insurance is that the process seems painful, arduous, or confusing. Expense is also a reason that Americans don’t get life insurance because they believe they can’t afford it.
But life insurance doesn’t have to be expensive, and when you understand what term life insurance is and what whole life insurance is, you will find it more affordable than you imagine it to be now.
Term life insurance is a type of life insurance that lasts for a specific term or amount of time. It is also the most affordable type of life insurance.
So when you purchase term life, you will have that insurance for a set amount of time, such as 10 or 20 years. It is meant to cover basic expenses for your heirs in the event of your death within that “term” of time.
Most Americans with term insurance in their families don’t ever see that paid out. But it is effective to have to protect your family in the unlikely event of early death.
It is also usually easier to get than whole life insurance.
Whole life insurance is a little bit more complex and is also more expensive. But with whole life insurance, you keep almost everything that you pay into it.
Most Americans without life insurance overestimate how much it costs. Find out how much life insurance you need, and how affordable it can be.
Term Life Insurance Specifics
Term life insurance is a specific kind of insurance that covers you for a set amount of time. If either you or your spouse should pass within that term, the amount is paid out to your heirs and beneficiaries.
It’s that easy.
Term life insurance is also generally much cheaper than whole life insurance. It can cost as little as $10 a month.
Whole insurance is a little bit different. Most of the money that you put into it will be yours.
Whole Life Insurance Specifics
Whole life insurance is a little different in terms of what you get and what you pay into. In term life, you pay the insurance company and your heirs will never see a dime until or unless you pass away during that term.
But whole life insurance functions like an investment. You can cash it out almost anytime after you have paid into it for a certain amount of time.
Whole life insurance has a cash value over the term of your lifetime, as opposed to term life which simply has a cash value, only in the event of your death during that term.
Because of this cash value that accumulates, getting whole life insurance is also a lengthier process. You will likely have to undergo a physical when getting whole life insurance.
The difference between term life insurance vs whole life insurance is that simple. When you are researching the process, investigate the 5 things to look for when buying insurance.
How Do You Decide on Insurance?
When you are learning about the differences between term life insurance and whole life, the biggest question that should be on your mind is – what do you need. Cost is always a factor when you are purchasing anything, but it is not a significant factor in life insurance because it is likely that you will be able to afford life insurance, no matter what your lifestyle is like today.
If you have a large estate, or a complex financial situation, or a child with special needs that you worry about, then whole life insurance is probably the best solution for you.
Life insurance is simple. You want cash for your dependents or heirs in the event of your death.
If you need a lot for them, a larger policy is the better choice, and a whole life policy can probably give you the best for your money.
But if you don’t need a lot, and they will be able to meet their own financial needs in 10 or 20 years, then a term life policy is probably enough for you.
And this is usually why many Americans get term life.
You only want money for your heirs when you can no longer support them. In 20 years, they are likely able to support themselves, and you won’t need life insurance anymore.
But if you have a complex situation and you are unsure of what the future holds for your dependents, you can purchase peace of mind through whole life insurance.
And there, you have the added benefit of cash value for you accumulating throughout the course of your life.
See? Life insurance is easier and more affordable than you think!
Get Your Quote Today
Most Americans without life insurance are avoiding the process because they think it is too expensive, or too much trouble to get. And of those that do have it, approximately 1 in 5 think they don’t have enough.
Of the Americans that sought information about life insurance last year, approximately half of them said that they were more likely to purchase it if they did not have to undergo a physical examination.
There are over 288 million life insurance policies in the United States, and the average face value of those is around 163 thousand. This should give you an idea of the benefits between term life insurance vs whole life insurance.
Today, whether you are getting a term or whole life, it is very easy to get, and you don’t always have to undergo a physical to get it. Find out how easy it is to secure your family’s future, and get a free online quote and compare life insurance rates for free!