Life Insurance 101: Should You Choose Term or Whole Life?

Introduction

One of the most common questions people ask when looking for life insurance is: “What’s the difference between Term and Whole Life?” Choosing the wrong one could mean paying too much or leaving your family unprotected.

In this guide, we break down the pros and cons of each so you can make a confident decision.

1. What is Term Life Insurance?

Think of Term Life like renting a home. You pay for coverage for a specific period (usually 10, 20, or 30 years).

• Pros: It is the most affordable way to get a large death benefit. It’s perfect for covering a mortgage or protecting your children until they are adults.
• Cons: Once the term ends, the coverage stops. There is no “cash value” built up.

2. What is Whole Life Insurance?

Whole Life is like owning a home. It covers you for your entire life, as long as you pay the premiums.

• Pros: It never expires. It also includes a “cash value” component that grows over time and can sometimes be borrowed against.
• Cons: It is significantly more expensive—often 5 to 10 times the price of a Term policy for the same death benefit.

3. Which One Do You Need?

• Choose Term if: You are on a budget and want to ensure your family can pay off the mortgage or college tuition if you pass away during your working years.
• Choose Whole Life if: You want a permanent policy for estate planning or final expenses and can afford the higher monthly payments.

Conclusion

The best policy is the one that stays in force when your family needs it most. If you aren’t sure which fits your budget, contact us today for a free needs analysis.