Whole life insurance and term life insurance are similar in that they both provide a payout upon the insured’s death.
However, there are significant distinctions.
A term policy only pays out if the insured dies within a predetermined period of time, typically 10, 20, or 30 years, in contrast to whole life insurance, which provides a guaranteed death benefit for the insured’s entire life.
There are additional things to think about. Premiums for a whole life policy are significantly higher than those for a term policy with the same coverage limit in order to provide greater benefits.
While term rates rise with each renewal as the insured ages, whole life premiums typically remain constant throughout the policy’s term.
Lifetime coverage Cash value you can use for loans, withdrawals, or premium payments Guaranteed death benefit amount Predictable premium payments Tax-free loans
Advantages More expensive than term life Cash value may grow slower than with other policies Limited ability to adjust the death benefit.
