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What Makes Life Insurance Policies Different?

By: Joe Stewart

I've had several people ask me what the real difference is between Term And Whole Life Insurance and which is the best
option for them. As much as I like to help, the best that I can really do is explain the difference between the two and the pro's and con's of each type of policy. This way, the consumer, to make an educated decision before you purchase a policy.

Whole life insurance covers you for life, as long as you maintain the premium payments. These policies are in effect util
your death or the age of 100 years, whichever occurs first. Some of the benefits of a Whole Life Insurance policy are that you will also build an account that has actual cash value. It works like this. Some of your premium goes to buy life insurance, While the rest is placed in safekeeping for the future. You may borrow against this account if you need to, but you must pay it back. This gives you a bit of piece of mind in case of expenses at college, auto repairs or any other of lifes little emergencies.

Some of the cons of Whole Life Insurance is that it can be expensive. The premium payments for whole life insurance coverage
will be a lot higher than a Term Life policy would be. Another con is that as you get older the savings account feature becomes less attractive For a young man or woman, this makes more sense because they have their entire lives ahead of them, but for someone middle aged or above, I'd seriously look at Term instead.

Term Life Insurance is just exactly what it says it is, "Term". This means that you are covered for a certain time frame or a
Term. You could buy a Recurring Term, "20 Year Term", Guaranteed Term, ect. Did I explain this well enough?

Term Life is also known as "pure life insurance" because because all you buy is insurance with no savings plan. Some of the "cons" or differences between Term and Whole life are, unlike Whole Life policies, there's no savings account that accumulates or to borrow against. You only pay for insurance coverage. Another con is that, as stated above, some Term policies are only for that specific Term or time frame, not your entire life. Some Term policies, such as Guaranteed Term, can be rolled over, but that's another story. I explain everything at my website.

Most Term policies Only last a specified period of time. An example of how this can be used would be for the "breadwinner" of
the household, who's middle aged and the kids are grown. He or she has been paying on their major assets, such as their home, ect. for several years and they need some security to make certain that if anything happened, everything would be taken
care so that the family could go on without any major issues, other than the loss of their loved one. A 10 or 20 Year Term Life policy might be a good option for the people in the example above, depending on their living arrangements.

Hopefully, you understand now why it's difficult to give counseling to people without knowing their specific circumstances. Just learning the differences between these two more popular types of insurance policies should put you ahead in the game of life insurance.

Hopefully, you understand now why it's difficult to give counseling to people without knowing their specific circumstances. Just learning the differences between these two more popular types of insurance policies should put you ahead in the game of life insurance.

Joe Stewart is a Webmaster and former Life & Health agent. He's made understanding life insurance mamageable for consumers. You can read detailed explanations about life insurance at his website TheLifeInsuranceGuys.com or by clicking on Whole Life Insurance Quote Online

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