Choosing How to Protect Your Family: Term vs. Whole Life Insurance
While some people debate whether term life insurance is better than whole life insurance, it's a little like comparing a screwdriver and hammer. The two are different tools, and which one is the right choice depends on what you need to accomplish. Shopping for life insurance starts by defining your goals so you can select the right tool to protect your family.
Once you understand the differences between term and whole life, it is easy to get free quotes on those policies. You can use quotes to shop for insurance within each policy type, or compare the two so you can weigh the costs against the benefits.
Term Life Insurance
Term life insurance offers a constant premium over a specified term. If you die during that term, your designated beneficiary will receive the policy's death benefit. If you do not die during the term, the policy does not pay out any benefit.
Term life insurance only returns a benefit under these specific circumstances, therefore it is usually cheaper than whole life insurance. For young people who are just starting their families, getting a cheap life insurance policy should be an immediate priority. Also, obtaining protection for a specified term suits their needs, since their children will grow up and need less financial protection over time.
Whole Life Insurance
Whole life insurance is a little more complex than term insurance. It is permanent because it accumulates value rather than simply existing for a specified term. Often, whole life insurance has an investment component which could pay dividends to the policy holder and/or let the policy holder participate in investment results.
Due to these added features, whole life insurance is best suited to people whose needs go beyond just obtaining an affordable life insurance policy. Whole life insurance is likely to cost more than term, but it also builds value. This option may appeal to people who want to start accumulating investments. This makes it a more complex decision, since you have to evaluate both the insurance benefit and the investment merits of a given policy.
Shopping for Affordable Insurance
Given the reasons above, you cannot directly compare the premiums of whole life insurance to those of term insurance. However, you can use the Internet to get free quotes within each category to find the most affordable and competitive insurance. Doing this you will determine the most cost-effective way to protect your family.