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Term Life Vs. Whole Life

Term life insurance and whole life insurance both have their short list of pros and cons and are typically a matter of personal preference or cost. For those seeking a life insurance policy that is more versatile while holding actual value, a whole life policy wins out in this comparison.
Term life policies are less expensive overall, but you must accept there is an ultimate end provided you do not extend the term. Determining what policy is the right choice for you can depend on many factors. Factors such as health status, age, and the money you have available to pay for your policy should more or less guide your decisions.

Advantages And Disadvantages Of Term Life
The number one benefit of term life insurance policies is cost. The inexpensive price and ease of obtaining this type of insurance plan are due to its overall limitations. The primary limitation is, of course, term length. Once your term has ended, bar any renewal, your policy is no longer in effect. Death benefits are the only payout option available so a term life policy is not truly an asset, nor does its value increase over time.

In some plans, as the prospective policyholder’s age increases, so does the monthly payment. In others, the premium is guaranteed to remain the same over the life of the policy, with only renewals or extensions having the potential to alter the paid premium. Many term life policies have the advantage of being converted to whole life policy if you so choose. You can also have a term policy as additional coverage on top of a whole life policy you already possess. Term life is a good option for those indecisive about their need for a policy.

Advantages And Disadvantages Of Whole Life
A whole life insurance policy may be more expensive at first glance, but the variety of benefits it includes can make the decision more than worth the extra cost. Most importantly, whole life lasts for the duration of your lifetime with no need for renewing or extending your policy. The main attractive feature of a whole life option is that it builds up cash value gradually over time. This cash value is a true asset, and is protected from being snagged by creditors as an added bonus. It can be withdrawn early or simply borrowed. Withdrawing money this way is tax-free, provided the amount withdrawn is less than the amount you have paid into the policy via premiums. As a final note, insurance policy shoppers should be aware that health exams to determine medical conditions tend to be required and far more scrutinized for whole life plans.

Regardless of age, the purchase of life insurance is frequently a sound decision. There are many variables that can alter which life insurance policy is ideal for you as every situation is unique. Performing adequate research and weighing the pros and cons of different policy types can help you determine the policy that fits your needs.

Whether you have dependents to support, estate planning needs, or you simply want to reduce the financial impact of your death, life insurance can be a useful tool to address each of these issues. The cash benefit of a whole life policy is a useful asset for any financial planning. Contact the team at BD Financial Concepts to help you in your journey to expand your portfolio and determine which options are fit you.