Term Life Insurance Policies Vs Whole Life Insurance Policies

Life insurance Policy coverage is a necessity that most people understand. But what they often don't understand is the differences between term life and whole Life insurance Policy.

There are three main differences between a term life policy and a whole Life insurance Policy.

Insurance Distinction #1

Value. Whole life and term Life insurance Policy both offer coverage so long as the policy is in effect. Meaning that as long as payments are being made both policies offer a pay out in case of the policy holder passing away. But the main difference is how the only benefit to keeping the term life policy essentially is its death benefit payout.

A whole Life insurance plan also builds a cash value, which can be withdrawn if you take a loan from the insurance company.

A term Life insurance Policy coverage has no cash build up value.

Insurance Difference #2

Price. Because a whole Life insurance Policy has a cash value feature it's more expensive. The extra expenses go towards the investment facet of the policy, and towards the cost of managing the actual funds. Traditionally insurance companies also pay out higher commissions to agents that sell very existence insurance policies.

On the other hand, a term Life insurance Policy coverage only offers one benefit. And that is the shell out that the designated beneficiary receives. Because of this a term life can be ten times cheaper than a whole Life insurance Policy coverage.

Most people who are simply looking for Life insurance Policy coverage tend to opt for term life because it is simply cheaper.

Insurance Difference #3

Medical check-up requirements. Whole Life insurance Policy issuers require that applicants under go a complete medical evaluation to determine their health status. This could be a time consuming and cumbersome process for some. On another hand, there are term Life insurance Policy companies that don't require a medical check up.