Term life insurance vs whole life insurance. When I see this phrase I can’t help but feel there is some contest or tournament going on. Is there?
This is good for a conversation or debate but is there really some sort of contest here? Do term policies compete against whole life policies? I say they don’t.
Each policy fits different types of needs. You may buy a 5 year term policy to protect you family from a financial problem that may result from your death within a short period of time.
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Term Life Insurance Vs Whole Life Policies
For example, you may want to guarantee a child’s or grandchild’s college costs. You may, on the other hand, want to make certain that a so far unpaid loan is paid off at your death. You don’t want your family to be burdened with these things.
You may choose to buy a 20 year term policy or a 30 year term policy to protect your family while they totally depend on your income just to live.
On the other hand you may buy whole life insurance because you want to protect your loved ones if you should die anytime between now and age 100. There is a certain permanence expressed when one buys whole life.
Whole life costs more than term insurance simply because the life insurance company is at risk for a longer period of time. You buy a 10 year term policy and you don’t die within 10 years the policy ends. The company is no longer at risk.
You buy a whole life policy the life insurance company is always at risk. They must pay your family if you should die anytime between now and age 100. You therefore pay a higher premium.
There is no contest between term insurance and whole life. These policies serve different needs.
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