Oklahoma Life Insurance
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If you’ve been keeping up with my blog posts lately you’ll know I’ve come to adding a few news posts from around the web on this subject. I’ve got a couple more today that are new and updated, so let me know what you think of em…
How To Get Cheap Whole Life Insurance | Tips Ideas & Solutions
Among this many life insurance corporations now operating on the Internet, Read the rest of this entry »
Does Term Life Insurance Vary From One State To Another In The United States Of America?
When an individual sits to plan for his future or that of his family and children, there shouldn’t be any reason to look at his insurance policies. Though this is the commencing sentence of this article, it may seem a little more than confusing to a lot of the readers Read the rest of this entry »
What is the difference between a term life insurance versus whole life insurance?
Carl
Oklahoma City OK
There are two basic types of life insurance: whole life and term. Whole life insurance, sometimes called permanent insurance, pays your beneficiaries when you die while term life insurance pays your beneficiaries the amount in the contract if you die within the specified term or period of the policy.
As long as premiums are constantly paid on time until the entire the cost is paid, whole life insurance provides life time protection. This type of insurance builds up cash value over time. Cash value is different from a face amount. Unlike the face amount, your beneficiaries will not receive the cash value if you die. It is the amount that you, as the policy holder, will get if you file for a loan on your policy or the amount you could get if you surrender the policy before its maturity.
A whole life insurance has several advantages using your accumulated cash value. Regardless of your credit history, you can borrow a loan from your insurance company using your cash value as your collateral. You can also use it to pay premiums or to buy more coverage. If you cancel your policy, you will get your cash value in lump sum.
On the other hand, term life insurance is in-effect over a specific period of time only. Therefore, it is much preferable to choose term life insurance versus whole life insurance when your financial obligations are on a definite term such as home mortgage or tuition. Terms are usually in 5, 10, 15, 25 or 30 years. Unlike whole life insurance, death benefits are only given if the policy holder dies within the set period.
However, because there is a defined time, protection provided is not for life in term life insurance versus whole life insurance. Premiums for term life insurance versus whole life insurance are also less expensive but may increase at a point specified in the policy.
Is Whole Life Insurance Better than Term Life Insurance?
Chris
Ardmore OK.
Chris,
Even with all of those great benefits, there are some drawbacks to
having a whole life insurance policy. For example, the investment component that comes along with a whole life insurance policy is not always what it is cracked up to be. Whole life insurance policies are no account flexibility. This means you can not spread your money among different accounts, nor can you move your money from one account to another. Whole life insurance policies also will not allow you to invest your money into different accounts.
It’s true that a whole life insurance rate tends to be more expensive than a term life insurance rate; this is why many people call term life insurance policies the most popular life insurance policies. However, a whole life insurance rate is higher for a reason; a whole life insurance policy will offer its policyholder benefits and options that a term life insurance policy won’t.
Excellent Question.