There are several kinds of life insurance coverage that you can choose from, but all of them are under two umbrellas: term or whole. Term insurance policies are only active for a “term, ” and whole life insurance plans are going to give you a permanent form of coverage. Deciding between the two are is an important decision and will have an enormous impact on your life insurance protection.
Term Vs. Whole: Head to Head
You’ll need to look at the characteristics of each type of plan and decide which one is going to work best for you. Before we start looking at which one is best for you, let’s look at the basics of each type.
The obvious distinction between the type categories is the length of the coverage that you’ll get. With a term insurance plan, you only purchase one of these policies for a set amount of time.
With a whole life policy, these plans are never going to expire. Some insurance companies have age limits on their whole life plan. Some insurance companies have expiration dates, but most companies will allow you to have life insurance protection until your around 100-years-old.
Term VS. Whole: The Cost
One of the most important factors that applicants look at when they’re shopping for insurance coverage is the cost of the plan.
When you’re deciding which type of plan that you’re going to buy, one factor that you should consider is how much money you can spend on your life insurance premiums. There is going to be a significant gap between the two kinds of policies.
If you want cheap, choose term. These plans are going to be much cheaper than all of the other options on the market, especially compared to a whole life policy.
We can’t say exactly how much more expensive a whole life policy would be for you because there are so many determining factors, but in most cases, term policies are three times cheaper.
Term Vs. Whole: Which is Right for You?
When you’re choosing between the two options, there are several different questions that you can ask yourself to guide your decision making. Let’s review some of the factors you need to look at.
The first question that you should ask yourself is, “How long am I going to need life insurance?” this might seem like an obvious question, but it’s going to be one of the most impactful. For most applicants, they will only need life insurance until they reach retirement age (or around there).
The primary purpose of a life insurance plan is to pay off all of your debts and other final expenses, which means that if you reach a stage of life where you no longer hold a massive amount of debt, then you don’t need insurance coverage.
Life insurance will ensure that they have the money to get through the difficult time, without having to sacrifice their standard of living. When you’re deciding between a term plan or a whole life policy, you’ll need to consider how long you will have dependents.
If you have children that are getting close to going to college or earning their own paycheck, then you will only need life insurance for a short time, which means a term plan will be a better option.
These are only a few of the different expenses that you will need to add up before you purchase life insurance coverage and factors that you will need to determine. If you are confused by any of these categories, please give us a call. Not considering every factor could leave your family with inadequate coverage if something were to happen to you.
No Exam Term Life Insurance or Whole Life Insurance
One additional choice is to buy a no exam life insurance policy. As the name implies, these plans let you get life insurance without the medical exam. For some people, these can be the perfect option, but for a lot of people, they aren’t the best choice. It’s essential that you compare all of the possible plans before buying one of them.
Usually, no exam insurance is term, but there are a lot of carriers which sell whole no exam coverage.
The pros of no physical exam insurance are it’s quick and simple. The cons are it’s expensive and have coverage limits.
Unless you’re just looking to skip the medical exam because you don’t have the time, or you hate needles, then you should only use no exam plans as a last resort for life insurance coverage.
Term Vs. Whole Life Insurance: Independent Insurance Agents
Now you know some of the key differences between the two kinds of insurance. Are you ready to go out and purchase a policy? We hope so!
If you’re not, or you want help, we are here.
Buying life insurance can be a tricky purchase. This is why we always recommend consumers get the help of an experienced and qualified independent agent.
This is especially true if you have any health problems. Because every insurance company has different medical underwriting, if you’re a high-risk applicant because of your health, then one company might decline your application, while other companies are going to give you cheap coverage.
Our experienced agents can walk you through the decision-making process to ensure that you’ve picked the best plan and they can also bring you personalized quotes. Don’t waste hours and hours on the phone calling different companies.
Have questions? Need help? Give us a call.