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In laymans terms - what is the difference between term and whole life insurance and which one do i want ? |
In laymans terms - what is the difference between term and whole life insurance and which one do i want ? Term insurance is cheaper鈥攁ll you get is the life insurance. When what ever term is up, you have not accrued any cash value. Main two options (besides shopping around for the best price) is staying insured for the same amount at an increasing premium rate or maintaining your same premium for decreasing insurance coverage. It is the simplest least gimmicky policy鈥攎uch like car insurance鈥攊t pays it's value when you die while covered by the policy. Many policies guarantee that it it is renewable. Life and whole life insurance is more expensive and a part of your premium is put into a savings account so that you gain cash value that you can borrow against or that can be fully paid (to the extent of the value of the insurance) without having to pay further premiums. In my layman's opinion term life is simpler and cheaper. There are a lot better investment strategies than investing in life insurance and buying double indemnity for accidental death is money thrown away.. How old are you? It's Lehman's terms. Term is for a certain period of time. Whole life insurance is your entire life until you die. Term only covers you for a fixed amount of time (like 3 months or a year). After that, you croak, your family gets nothing. Whole life, means just that. It's your whole life. You generally pay the premium each month/year. It may also offer an investment option, where part of your premium gets invested, and you can take a loan out against that money. ...Term life over time looses its value... it's designed to give you the biggest "Bang" for your buck in the short term... Whole life will grow and gain a cash-value (in time)... it gains in worth.... Which one do you want....? now that's a personal decision... maybe you need to ask the "Aflack Duck" Term life is like auto liability insurance. The coverage is in effect as long as you pay the monthly premiums. Whole life is like a really lousy savings plan. You pay on the policy until the maturity date, which may be 15 or 20 years. It then stays in effect until you die. Some policies you can cash in after they are paid off. It's layman's terms actually. This question was already answered if you search for it under answers. |
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