Term Life Insurance or Whole Life Insurance? An Endless Debate!

If you ever entered in the realm of online life insurance, you have surely noticed the endless debate between term life insurance supporters and whole life insurance supporters. Both sides claim that their policy offers the most numerous advantages and try to besmirch the opponents.

young-couple-tipsBut whether you should choose term life insurance policy or whole life insurance depends on your goals and financial possibility. Every investment is a mix of these factors and you must know the pros and cons of each policy before making any decision.

Term life insurance is perceived as the cheapest policy. This is true, but only for short terms. It has the best premium cost- protection ratio in the first 10-15 years of policy. After 15 years, term life insurance becomes a bit expensive. Premiums are renewed on fixed periods of time and they always get more expensive.

So, term life insurance is ideal for short goals, like protecting your family while you are still working (until retirement) or until the children are grown ups.  The death benefit is collected only if the insured dies while under coverage. It has no cash build element, so do not expect your savings to grow with a certain additional interest rate.

Whole life insurance offers lifetime protection. The policy lapses only if the insured cannot pay the premiums. Still, you can ask the insurer to waiver the premiums, or allow you to skip premiums for a month or two. Premiums are locked at the same value, but they already start a bit pricy.

The good news is that whole life insurance has a cash build component. A specific interest grow rate will be added to your savings and this will be later collected by your beneficiaries.  It is the ideal policy for those that want to leave a generous death benefit for its dependents.

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