Before you set your sights on a life insurance carrier, you have to to determine if the policies they’re offering align with your needs. When it comes to shopping for a life insurance policy, there are two all-important terms that you have to familiarize yourself with: term life insurance and whole life insurance.
So, what the heck is the difference between the two?
• Term life insurance is often looked at as a “no frills” plan, as it involves nothing more than paying a fixed premium for a specific amount of time. For example, you can get a term life insurance policy for 10 years that will pay your beneficiaries if you should die during that period of time. But if you should shuffle off this mortal coil after those 10 years expire, your beneficiaries won’t get a dime.
• Whole life insurance is, on the other hand, a bit more loaded than simple term life insurance. With whole life, the policy is for the life of the insured, offers fixed premiums and growing cash value.
How can you know which one is best for you? That all depends – but if cost is a concern, you’ll be better off opting for a term life insurance policy since these typically cost far less up front than whole life insurance plans.
To dig a bit deeper and to find out what type of life insurance policy is best for you, talk to a life insurance carrier representative about the options that are open to you. Granted, life insurance isn’t exactly a cheery subject, but it’s one that’s best discussed sooner than later.