term life whole life insurance

Term Versus Whole Life Insurance

Should I buy term or whole life insurance? Well, let’s start with the differences between term life versus whole life insurance.

Term life insurance covers you for a specified amount of time at a smaller price and is a much simpler type of coverage. Whereas whole life insurance is lifelong insurance coverage and insurance that covers even more in your retirement with living benefits and, in some cases, offers a savings plan that builds up over time. 

Consider the reasons you need life insurance:

  • Look at term life insurance if your life insurance needs have a definite end, such as the years until you retire.
  • Consider whole life insurance for longer-term financial planning goals, such as estate planning or funding a trust.

Both term life insurance and whole life insurance offer guarantees: Premiums won’t change, and the death benefit amount paid to beneficiaries doesn’t change. The main differences are in coverage length and cash value.

Key Differences in Term Life Versus Whole Life Insurance

Term life insurance is coverage paid for by a policyholder to be given to a named beneficiary in the event of the policyholder’s death. It offers no cash value, and it’s possible you could outlive the policy.

Whole life insurance acts similarly to a low-interest investment and provides a payout no matter when you pass away, as long as you’ve paid the premiums.

Unlike term life insurance, where the premium is low and paid over a short period of time, whole life insurance is paid over the course of a policyholder’s lifetime, and premium rates are significantly higher. When the policyholder dies, the beneficiaries receive a death benefit, provided that the insured made the required payments and abided by the terms of the policy agreement up to the maturity date. 

Key takeaways:

  • Term life is “pure” insurance, whereas whole life adds a cash value component that you can tap during your lifetime.
  • Term coverage only protects you for a limited number of years, while whole life provides lifelong protection—if you can keep up with the premium payments.
  • Whole life premiums can cost five to 15 times more than term policies with the same death benefit, so they may not be an option for budget-conscious consumers.

Contact Your Independent Life Insurance Agent Today 

Life insurance isn’t one size fits all. Term life and whole life insurance each have their advantages and disadvantages. The policy you choose will depend on your circumstances and budget. I can help you make the right choice for yourself and your family. Call me at (912) 660-5236 to schedule a no-cost, no-obligation appointment. 

I am licensed in Georgia, South Carolina, Florida, Pennsylvania, and Alabama.