Those unfamiliar with the types of life insurance out there usually think of whole insurance, and when they actually begin shopping for it they are confused about the differences between a term or whole life insurance policy. Some are mistakenly under the influence that term policies give less useful coverage than a whole policy, but that is not the case. However; a whole life insurance policy is just the thing for anyone seeking long-term, high benefit coverage.
Term coverage only covers you for the amount of years that you agree on when taking out the policy. After that, you are left without coverage. No coverage and thousands of dollars in wasted premiums is what you will most likely end up with. No more than 1% of term policy holders pass away during their coverage. And while that is fortunate, that also means you will have put forth a lot of money to no avail.
A whole term life insurance policy covers you from the day you have taken out the policy until the time comes for your family to collect the benefits, no matter how long that may be. Whole policies are more stable for the most part, but they are much more expensive than term policies. This is due to the higher cash out rate.
Because whole policies last as long as the policy holder continues to pay the monthly premiums, the vast majority of policy holders do cash out. It's also important to keep in mind that term policies can rarely ever reach or extend until you are 75 years old, meaning that whole is the only option for the elderly.
Deciding between a term and whole life insurance policy isn't difficult if you know your priorities and means. Work with what you know and making a knowing decision.
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