If you’ve ever wondered what kind of insurance would best fit you and your family, you aren’t the only one. Insurance policies have been a financial support and a tax-saving avenue for decades. This makes it vital for people to understand which one to choose if they ever need to. Doing your own research is always the better choice compared to relying on word of mouth.

After all, you will always be more at ease trusting your own judgments when it comes to investing money.

To get you started, here’s a little comparison between term and whole life insurance that will help and guide you through your research

Choosing the Right Insurance: Term or Life?

To find out what the right insurance coverage is for you, you must first understand what a term and whole life insurance entails.

Let’s start by discussing term life insurance.

Term insurance is an insurance coverage that is applicable for a limited period of time and at fixed rate for the term specified by the insurance provider.

The pros of term insurance

• This type of insurance is ideal in the event where there is loss of income so that your family is supported financially.
• The payments for term insurance start at quite a low cost, making it easier to pay in the initial years.
• If there is ever a time where the benefits of the term insurance are to be transferred over to a beneficiary, it can be done tax-free.

The cons of term insurance

• While the payments for a term insurance cover start off low, the premiums increase every time it is renewed.
• There is no cash value to a term insurance policy.

Now that you know the basics about term life insurance, let’s move on to whole life insurance.

Whole life insurance, as the name suggests, is an insurance that is in force for a policy holder’s entire life. The only thing that needs to be done is for the premiums to be paid on time until the policy matures.

The pros of whole life insurance

• Unlike term life insurance, whole life insurance offers coverage all your life, as long as you keep paying the premiums.
• With whole life insurance covering you for life, it also helps cover the expenses after death, such as the burial costs and other last rite expenses.
• The premiums for whole life insurance never increase if you keep paying timely.
• Whole life insurance helps build cash value.
• The benefits of whole life insurance can be transferred to a beneficiary tax-free!

The cons of whole life insurance

• The payments for whole life insurance cost a little more than that of term life insurance. However, the flexible payment methods available make up for the extra cost.

The Takeaway

There is no doubt that both the term and whole life insurance comes with its own pros and cons. However, choosing one for you depends a great deal on your age, the kind of coverage you are looking for, and the amount of premium you are willing to pay every year.

For those of you who need coverage without an expiration date or fluctuating premiums, opting for a whole life insurance policy is the perfect choice. On the other hand, if your budget is low, choosing term insurance plans that start off with low payments can help you get started.