The difference between term and whole life insurance.

The first type of life insurance is term life ins. Term life is great for people who do not have a lot of extra assets or cash saved up. This policy can protect your dependants against the loss of your income. Your dependants will only receive the payout if you die during the preset term whether it is a year or five. At the end of the term you will not receive any reimbursement on the premium. The premium is lower than other life insurance plans and some plans do not require a medical physical to renew. However, the premiums do increase with age.

Whole life insurance covers your life insurance needs for your entire life regardless of how long you live. Premiums are much higher early in the plan to help balance to higher premium as you age. Typically you only pay the premiums for a set number of years or until a certain age. With a whole life plan you can accrue interest on the cash value of the plan and you may also borrow against it if money ever gets tight. This is not recommended however because the overall cash value of the plan will decrease defeating the purpose of purchasing the policy in the first place.

A term life ins policy and a whole life policy have a preset benefit amount determined at the time you purchase the policy. A universal policy offers more flexible options with the ability to invest a portion of the policy. With a universal policy the benefit amount is determined by the value of the policy at the time of the insured’s death. Only a portion of the policy is invested and there are tax credits available for the money invested. Like a universal policy a variable life policy allows of the policy to be invested. However, a variable life policy offers a more flexible plan giving you more control over how much of the policy you wish to invest. With a variable life policy the monthly payment is determined by the value of the portion of the policy tied up in investments. If the investment portion is doing well the monthly payment will be lower. However, if the invested portion if performing poorly then the monthly payment will be higher.

Choosing the right policy may be difficult but assessing your needs prior to looking for an online quote can relieve the stress. Most experts highly suggest that you seek a minimum of three quotes.