Life Insurance: Term vs Whole Life Explained
When it comes to protecting your loved ones and planning for the future, life insurance is a critical step. But with several types of policies available, choosing the right one can be confusing. Two of the most common options are term life insurance and whole life insurance—each with its own features, benefits, and drawbacks.
In this blog, we’ll break down the key differences to help you make an informed decision.
What Is Term Life Insurance?
Term life insurance is a temporary form of coverage that lasts for a specific period, usually 10, 20, or 30 years. If you pass away during the term, your beneficiaries receive the death benefit. If you outlive the term, the policy simply ends—no payout, no cash value.
Pros of Term Life Insurance:
Affordable premiums: Term policies are often cheaper than whole life, especially for young and healthy individuals.
Simple and straightforward: Easy to understand with a clear purpose—protection for a set period.
Great for short-term needs: Ideal for covering temporary obligations like a mortgage, children’s education, or income replacement.
Cons of Term Life Insurance:
No cash value: You can’t borrow from it or cash it out.
Coverage expires: Once the term ends, you’ll need to renew or convert the policy, often at a higher rate.
What Is Whole Life Insurance?/h5>
Whole life insurance is a permanent policy that lasts your entire life, as long as premiums are paid. It also builds cash value over time, which you can borrow against or withdraw.
