Term and whole life are both popular forms of insurance. Which one is right for you will depend on your specific situation and goals. At Five Star Insurance Agency in Fords, NJ, we are happy to explain the differences between these two types of life insurance.
Term life insurance is for a specified time period, usually 10, 20, or 30 years. Term life will pay the agreed-upon amount at your death, as long as you meet the qualification guidelines, regardless of how long you have had the policy. If you pass away after one year or nineteen years, the benefit will be the same.
Whole life insurance is designed to stay with you for the remainder of your life. These policies build cash value over time. Once you have cash value in the policy, you can borrow against it or withdraw it. Most policies will pay the death benefit plus accumulated cash value upon your death.
Which One Do You Need?
When choosing which type of policy is right for you, an important consideration is how long you will need life insurance. If you are 30 years old and plan to have significant savings and no outstanding debts by 60, 30-year term life would be a good option. If you pass away in the time period, it will cover your debts and help replace your income. If you pass away after 60, you have the savings to cover your final expenses and see your family through to retirement.
However, if you want insurance to cover you for the rest of your life, the whole life is the better option. It can also be used as a way of accumulating savings, which makes it a good option for many people. It’s also the best option if you would like to leave your family with a significant death benefit regardless of your age at your passing.
At Five Star Insurance Agency in Fords, NJ, we believe in offering clients the best insurance options for their needs. Life insurance is complex, with many considerations. Let one of our experienced agents help you determine which is best for you.