General Disclaimer: We are not responsible for any errors or other inaccuracies in the content on our website. All the articles here are presented with no warranty. The information displayed on businessbytes.net may be different from what you see when you visit a financial institution, service provider, or a specific product's site. The information provided on this website is solely for educational and informational purposes. Before you make any financial decisions or implement any financial strategy mentioned on the website, we recommend that you obtain considered and independent advice from a financial professional who understands your financial needs.
Advertiser Disclosure: Businessbytes.net does not include all the available offers. Editorial opinions expressed on the site are strictly our own and are not provided, endorsed, or approved by advertisers. Card Listings and other financial products that appear on this site are from financial companies for which businessbytes.net may receive compensation. This compensation may impact how and where products rankings on this site including, for example, the order in which they appear.
The Differences between Term and Whole Life Insurance
Life insurance policies and plans are an asset, and one should always have a plan for yourself and for your family. When selecting a life insurance an individual has 2 choices- term life insurance and permanent whole life insurance.
The Differences between Term and Permanent (Whole Life) Insurance
There are a lot of differences between the two insurance which might help you in making your decision:
Term insurance provides coverage for the specific time period, like 10 years or 15 years. Once the time is up you would have to renew your insurance.
Permanent whole life insurance will give you with lifelong coverage as long as the policy is in force.
The costs of term life premiums are lower than permanent ones but the cost of term life increases with every renewal whereas it remains same for permanent premiums.
Term insurance does not accumulate cash value as it doesn’t have a savings account whereas with permanent insurance there is a savings component known as cash value. One can choose to cash in or borrow against his/her permanent insurance.
Term life insurance can be converted into permanent life insurance whereas permanent insurance cannot be converted.
In the case of term life insurance, the policy may expire before the death of the person because of which one cannot claim the insurance money. But in permanent life insurance, their impermanent financial protection so beneficiaries will be able to receive death benefits even after the death of an insured person as long as the policy is in force.
If you want to save on your premiums and forego the long-term benefits go for Term life insurance and if you want cash value & other benefits then you should go for permanent whole life insurance. Furthermore, remember not to miss out any kind of premium payments.
Remember that any kind of default for payments or by providing wrong information may lead to serious problems and may lead to permanent termination of the plan.
We hate spams as much as you do. Get the latest financial news in your inbox!
top rated cards
Citi® Double Cash Card – 18 month BT offer
Citi ThankYou® Preferred Card
Citi Simplicity® Card - No Late Fees Ever
Citi® Diamond Preferred® Card – 21 Month Balance Transfer Offer