Term vs. Whole Life Insurance

When choosing life insurance there are a few different options you should know about. Choosing the wrong insurance plan can do damage to your financial plans. It is important for one to understand that when picking a life insurance plan you are trying to secure the financial future of your family should anything happen to you. When picking a life insurance plan you should be prepared to choose between the two basic types, term and whole life insurance plans. Term life insurance is typically for a period of time that can range from 10 to 20 years and then stop. Whole life insurance can vary in length and is driven more towards conservative investors.

Term Life Insurance

Having the option to purchase term life insurance can be very important should health problems start to arise. With a term life insurance policy you can have it set up so it stops after 10 to 20 years after which the policy is over. If you were to pass on during the set amount of years on the policy then you will receive then funds, however if you should live past the policy then you will not receive the funds. With term life insurance you also have the option for you premium to increase every year or you can have it set to a fixed amount. With an option like this it allows you to have more financial backing should your family need it. Term life insurance may be the best option for insurance in a case of short-term funding.

Whole Life Insurance

Do you have trouble saving? Are you a conservative investor? If these questions sound like they are driven towards you then whole life insurance might be the best investment for you. There are two types of whole life insurance that you should become familiar with and those are, universal life and variable life. Universal tends to be more flexible due to the fact that premiums can change from year to year. Variable life insurance can have great potential for an increase in the cash value due to the less of a guarantee with the premiums.

Making the Right Choice

Being confronted with different types of life insurance can be overwhelming at first for many due to the fact that it involves planning your death. Having the right financial investments set up for your family can be very important for all the bills that will be left behind after you pass on. When it comes time to set up your life insurance investments you will have to consider what investment is best suited for you. Since term and whole life insurance can be very different from one another it is important to know your financial situation and consider the financial situations of your family members after you are gone.

Additional Resources:

• articles.moneycentral.msn.com/Insurance/InsureYourLife/TheRagingDebateOverTermvsWholeLife.aspx - The Raging Debate Over Term vs Whole Life
• money.cnn.com/2002/12/17/pf/expert/ask_expert - Whole vs Term Life Insurance