Whole Life Insurance or Term Life Insurance - Which Is A Better Choice?
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People, for the most part, believe that life insurance is expensive. In actuality, the cost of insurance has fallen quite dramatically over the past decade.
Insurance is something that most folks consider, no matter what situation the economy is in. This is especially important if your spouse and/or children depend on you for their well being.
Life insurance is one of the keys to a successful financial plan for your family because it protects you and your dependents from many unpleasant surprises. Aside from addressing the risk of unexpected death and disability, some life insurance plans offer you a broad range of investments including guaranteed investment products.
Whole Life Insurance Policies
For example, whole life insurance is taken out for the duration of the policy holder’s life and offers a cash element to the beneficiary. Money can be withdrawn early from a whole life insurance policy. And, if need be, you can even surrender your policy and then you would receive a surrender value.
Money that you pay towards your whole life insurance policy can be invested in a variety of vehicles that accrue over time. The beneficiary of your whole life insurance policy will receive the amount you are insured for plus any of these investment bonuses when you die.
Term Life Insurance Policies
At the other end of the spectrum is term insurance, which is often referred to as ‘temporary insurance’. Term insurance provides financial protection for the ones you love should you die within the proscribed term of your policy.
Although you can often make arrangements to be covered for a term as short as one month, the most common time frames are ten, fifteen, or twenty years.
With term insurance there is no investment aspect. If
you survive the term of the policy there won’t be a payment. However, it is the cheapest form of protection available.
For only a couple of pounds per month, your business colleagues or your dependants can be covered for literally thousands of pounds.
When figuring how much life insurance you will need you should compare your expenses to the income you would have that the insured provides. If the insured is responsible for the day to day expenses, that amount should be covered (with inflation factored in) by the insurance policy.
Whether you are considering whole life insurance or term insurance, the younger you are when you initiate your cover the less it will cost.
Next, find out more about life insurance at Saga Life Insurance or go to http://www.TotallyMoney.com
Wendy Moyer is a professional writer.
