TERM VS WHOLE LIFE INSURANCE

The two main kinds of life insurance are term life and whole life insurance. The first one lasts only for a fixed time period. Whole life insurance on the other hand lasts for as long as the premiums are paid. There are many benefits to this form of insurance. But this comes at a price and whole life insurance rates tend to be steeper than other kinds of insurance. But this is no reason to completely rule out this option. Different providers have different rates, which though not widely varying, will still give some good options to choose from.

Advantages

The most important consideration is whether the selected insurance will provide adequate protection for the future. Here are some of the advantages of whole life policies. There is a cash value facility in place which a person can borrow money against, during the insured period. Also, as long as the premiums are paid on time, the insurance cannot be withheld if a medical condition is suddenly discovered. A big plus point is that the premiums are ‘level’ or consistent, and do not increase during the life of the policy. Another positive element is that because this kind of policy covers death benefits, the cash value actually grows during the policy term. This means larger dividends paid to the policy holder. In a nutshell, a whole life insurance policy is the best choice for people who like the ease of having all their wealth in one place and would prefer not to manage an extensive portfolio of insurance products.

What are whole life insurance rates?

The rates or premiums of a policy are one of the most important factors in whether it is popular or not. Whole life insurance rates are calculated based on a large number of factors. Some of them are: age, the physical and mental condition of the applicant, his/her occupation, level of investment required and the desired death benefit.

Usually insurance companies will have a proprietary formula which enables them to fix their premiums for all their products for different kinds of buyers. For whole life insurance rates, the providers will like to get customers who are at the lower end of the age spectrum as these people will have to pay the premiums till they die. The advantage for the customer here is that, the younger you are, the lower will be the rate of your premium.

It is important to remember that you will get only one chance to correctly select this kind of an insurance product. Once you have committed, you cannot withdraw from the policy without losing the premiums you have already paid. So decide carefully on term vs whole life insurance so that you get a policy that will give you the benefits you want and a price that you can afford.

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