Term vs. Whole Life Insurance: The Showdown

Are you in the market for life insurance? If so, the showdown between term and whole life insurance is sure to be a good one. While each type of policy offers benefits, it is up to you as the buyer to decide what is best. Some find that term life insurance is the dominant force, while others decide against it.

First off, you need to know that listening to yourself is more important than anybody else. Generally speaking, most experts will tell you that term life insurance is the only way to go. With that being said, they are not totally aware of your situation. If you let them sway you, you could end up with a term policy that does not suit your needs.

Why a showdown? Why can't the two types of policies coexist? Well, the differences between term and whole life insurance make this impossible.

On one side of things, you have term life insurance. These policies cover you for a specified period of time, with a specified level of coverage. For instance, you could take out a 20 year term policy with a death benefit of $100,000. Of course, this is flexible to meet your needs. Just remember, with term life insurance you no longer have the rights to your death benefit once your term is up. All the money that you paid goes to the insurance company, and you get nothing.

That leads to whole life insurance. With these policies you are paying a higher premium each month, but you get to keep your benefits until you die. At that point, your beneficiary will receive the money. Sure, you will have to pay for coverage month in and month out, but in the end it is worth it for some people because they know that their beneficiary will receive some level of money.

Which type of life insurance are you going to buy? Are you going to pay less for a term policy, or be ensured of life time coverage with a whole policy? This is a question that is hard to answer. But once you list the pros and cons for each, and then cross reference it with your personal and financial situation, you will know what decision to make.