Term Life vs Whole Life Insurance: Which Should You Choose?

While life insurance is an absolutely crucial resource to take care of your family in the event of an unexpected tragedy, most American adults don’t know enough about it. Not only is it a challenging conversation to have, but the topic itself can be somewhat complicated. Term life vs whole life insurance is one of the main differences to discuss — and that’s what we’re focusing on here.

At Unruh Insurance, we’re a team of local insurance agents committed to making these complicated insurance decisions easy to understand and as low-stress as possible. Read our blog to learn more about term life vs whole life insurance — and to find the coverage that is right for you. As always, reach out right now for your FREE insurance quote!

Understanding the Difference between Term and Whole Life Insurance

In order to make the right insurance decision for you and your family, you need to understand the basics. We’re going to start by explaining the differences between term life and whole life insurance.

What is Term Life Insurance? — This is the most affordable type of life insurance to buy, yet it can still provide a large payout for your family. Term life insurance only covers you for a set period of time, or a term. If you make the payments on the premium and pass away during that term, your family will receive an amount of money. Generally, the terms are set for either 10 years or 15 years, depending on the plan you choose.
What is Whole Life Insurance? — The primary difference between term and whole life insurance is that a whole life policy covers you no matter how long you live compared to a restricted term. However, the premium payments for a whole life insurance plan are far higher than a term life plan — expecting to pay a five-times-higher premium is typical. One other crucial difference between the two is that over time, whole life insurance builds cash value that can be borrowed against like any other financial asset.

Which Life Insurance Plan Should I Pick?

Good question. Now that you know the difference between term and whole life insurance, you need to find the one that’s right for you.

Term life insurance is primarily meant to cover unexpected or accidental death that could leave your family in financial turmoil. Generally, term life coverage is preferred by younger parents who need to have a plan for mortgage and childcare costs for their family should they unexpectedly pass. The lower monthly premiums allow you to build wealth while still staying protected by a safety net.

When comparing term life vs whole life, whole life insurance should certainly be considered by anyone of any age, too. Since it isn’t limited by a time period, you can always rely on this money for your family. For people who want absolute peace-of-mind that their family will be supported, whole life insurance is the best plan.

One of the life insurance strategies that we recommend involves combining term and whole life insurance. We often suggest having a fairly small whole life plan, with a small monthly premium, to cover final expenses. We then suggest pairing that with a larger term life plan that will provide a robust payout for a small premium — so that you’ll know your loved ones will always be protected.

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Life Insurance FAQs

While the best way to answer all of your questions is through a conversation with our knowledgeable life insurance agents, we’ve put together some of the most frequently asked questions we hear and the answers you want to know:

What is the difference between term life and whole life insurance?

Term life insurance only covers you for a set amount of time or for a set term while whole life insurance has no term limit. As a result, whole life insurance policies have a more expensive premium.

Are whole life insurance policies worth it?

Whole life insurance policies can be worth it if you want to cover your final expenses or leave a gift behind to your family or a non-profit organization. Their premiums will cost more than a term policy, however.

Is term life insurance a good idea?

Term life insurance is a good idea for many people. Since the premiums on term life insurance will be lower, more people are able to access the safety net of a life insurance policy.

Which is better: term life or whole life insurance?

Deciding which policy is better when comparing term life vs whole life insurance comes down to your individual needs, your budget, and more. In order to determine the best option for you, we recommend talking to a local insurance agent.

Can I have multiple life insurance policies?

You can have multiple life insurance plans as long as you maintain the premiums on each policy. Our life insurance agents often recommend that people carry a more robust term life insurance plan to cover unexpected tragedy and a smaller whole life insurance plan to handle final expenses.

Term Life vs Whole Life: Get Your FREE Quotes Today

Now that you have the information on term life vs whole life insurance, you might be ready to make a decision. If so, reach out for a FREE quote right now. However, if you still want to learn more, we’re here to help.

Although discussing life insurance can be a complicated and somewhat unpleasant conversation to have, it is ultimately very worthwhile. One of the best ways to have the conversation is in-person with a knowledgeable agent. Since Unruh Insurance is your local agency, we make it convenient to understand all of your options — and to find the best one for you.

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