Thursday, October 1, 2009

Term Vs Whole Life Insurance - Which is the Best Option & Can Save You the Most Money?

If you are in the market for live insurance, you may be pondering on the benefits of term vs whole life insurance. Both types have their own good and bad points, but what it comes down to is how long you want the coverage for and how much you are willing to spend on premiums per month.

Term insurance is just as the name suggests: life insurance for a specific term. Some may wonder the benefits of getting life insurance that lasts only through a previously specified duration and not until the actual time that the holder of the policy passes away, but there really are some.

The biggest reason that anyone gets term as opposed to whole is simply because the price is generally much lower -- in some cases a full 40% lower. For most families who do not have a high amount of disposable income, term is the preferred choice just to be safe. But it is worth noting that the turn in rate for term is only 1% -- simply not many people cash out the policy because they don't pass away within the time span of the policy. However; if the policy is taken out before a planned risky trip or medical procedure, it can actually make a difference.

Whole life insurance lasts from the time the policy is taken out until the time that the policy holder passes away, but guaranteed coverage does not come without a price. The rates for whole insurance are much higher than most people seeking insurance would like to pay unless they are certain they are going to need it. But the convenience of not having to extend coverage is a selling point for many.

Term vs. whole life insurance is purely a matter of personal preference and financial stability. More times than not, those who can afford whole insurance will purchase it, while those who cannot will choose term. The concept of having a life insurance policy that eventually runs out is a turn off for many, even if it is all they can afford.

No matter which type of coverage you decide on, be certain that now is the time to do it and shop among agencies carefully. Many insurance agencies offer both types of coverage, so it is all a matter of getting past the underwriting process. There is no "versus" in term vs whole life insurance -- it all depends on what you're looking for and what you can handle.

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