What is the difference between term life insurance and whole life insurance?

There are different types of life insurance that you can opt for according to your requirements. Insurance companies know the variations in society, and they are aware of the different needs of people. So, they offer different plans to serve the purpose of each type. The types of life insurance that companies offer include

•         Term life insurance
•         Whole life insurance
•         Universal life insurance

If you need term life insurance, you can get a Term Life Insurance Quote or if you are interested in the other types you can get them.  Now for you to choose which life insurance you need you must know the difference between them. You need to know what these policies offer and what kind of benefits you can avail by buying life insurance.

There are two types of insurances which are discussed mainly: term life insurance and whole life insurance.

What is term life insurance?

Term life insurance is a type of policy in which the contract is for a certain time. In case if the person dies during the term of term life insurance the beneficiaries of the policy are given the claim by the company. It only covers the death benefit. If the person survives the term then he/she can renew the contract, convert the policy, or just simply can terminate the insurance. The insurer pays the claim if the insured person dies during the term.

Benefits of term life insurance:

There are different benefits of term life insurance over whole life insurance.

•         It is the cheapest / affordable life insurance present in the market.
•         It can be renewed after the term ends.
•         If you think your requirements or needs are not constant and change over some time, then you can get this policy and convert this afterward as well. But for that, you should have a convertible term life insurance
•         The premium is low in this type of insurance.

What is Whole life insurance?

A traditional/permanent life insurance which is also called whole life insurance is a type of policy that provides lifetime coverage. It includes the death benefit if the insured person dies. The claim is paid to the beneficiary, but it also adds cash value. It has a saving aspect involved. But for all of it, one must pay the premium on time. It is different from term life insurance in a way that it gives a lifetime coverage while contrary to its term life insurance gives coverage for a specific term.

Benefits of whole life insurance:

Whole life insurance has different benefits, and you can choose if it suits you by reading them.

•         It has high premiums and expensive, but it adds cash value to the policy.
•         It gives a saving aspect to the policy and is like an investment.
•         Unlike term life insurance you don’t need to renew it after the term.
•         It gives the death claim to the beneficiaries if the insured person dies.