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If you are considering purchasing life insurance, you have the option to choose either term life insurance or whole life insurance. In order to make the right decision, you need to know the specific differences and advantages of each. Term life insurance offers a short-term solution that may last as long as 30 years. However, once your policy expires, your coverage also ends. That’s why you should also purchase permanent insurance coverage such as a whole life insurance policy.
Provides Lifetime Coverage With a whole life insurance policy, you will be covered until your death or until you stop paying your premiums. If lapsed payments are a result of your death, your whole life insurance will remain in effect. Therefore, your beneficiary will be protected from the financial burden of your loss. Covers Immediate Expenses If you want to protect your family from having to worry about expenses such as legal expenses, small unpaid debts or funeral costs, you should consider a whole life insurance policy. A good place to start is by purchasing at least $30,000 which can help your loved ones pay for your outstanding bills and funeral expenses. Although whole life insurance is not designed to cover large debts such as a house mortgage, it will help your family with immediate costs resulting from your death. Buy Whole life insurance When You’re Young The best time to buy a whole life insurance policy is definitely while you are still young and healthy. Insurance companies make money on the interest they earn from investing the money you use to pay for your whole life insurance premiums. Insurers anticipate that young, healthy individuals will live a long life and continue to make payments on their policy for the rest of their life. That’s why you pay less when you are young; insurance companies calculate a lower risk factor that you will die early and stop making payments. Whole life insurance & Older Individuals Insurance companies charge more for whole life insurance policies if you are an older individual. Regardless of the additional cost, you should purchase a whole life insurance policy when you are still healthy and can afford the payments. You may not be accepted for coverage when you are older, regardless of your health status. Most elderly individuals find the high cost of whole life insurance too prohibitive. Therefore, they often end up purchasing a term life insurance policy to cover them for the rest of their life. Instead of having to guess how long you are going to live, it is wiser to purchase a whole life insurance policy when you are young and healthy. |
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