Life insurance is an important part of financial planning, but there are several different options for you to choose from. The two most common types of policies are term life insurance and whole life insurance. Each offers unique benefits, but the differences are sometimes unclear. To help give you the guidance you need, here's a brief guide regarding the two.
What Is Term Life Insurance?
Term life insurance is a policy that's valid for a pre-defined period of time. There are no additional savings or investments attached to it, but it will provide a payout for a death benefit in case you pass away while it's active. You can choose the length of your term life insurance, but once the term ends, the policy expires. Although there are options for a five-year term, most people choose longer periods of time, like 20 or 30 years.
The primary benefit of a term life insurance policy is the price—it tends to be more affordable than other types of life insurance policies and more straightforward. However, there are no opportunities to grow your financial wealth and, once the policy expires, you'll either need to extend coverage or find something new.
What Is Whole Life Insurance?
Whole life insurance provides you with coverage throughout your entire life. It's a type of permanent life insurance that continues as long as you pay your premiums. After you pass away, the death benefit is paid but there's a little more to it than term policies. With a whole life insurance policy, there's an additional cash value attached that allows you to build your wealth, borrow against your policy, and use it for a loan. The earlier you open a whole life insurance plan, the lower your premiums, as they're locked in for life. However, many people find this option to be more expensive, and there are fines if you let the policy lapse.
When you're looking for the perfect life insurance policy for your needs, turn to the professionals at Farm Bureau Insurance of Thomasville. This Thomasville, NC, insurance agency has over 40 years of experience and can help you find the coverage you need. They also offer home, health, and auto insurance for comprehensive coverage and care. To learn more about their coverage options and plans, visit them online, or call (336) 475-3276 to schedule an initial consultation today.