What is term and whole life insurance?

Term and whole life insurance are the two main types of life insurance. Both provide financial protection to your loved ones in the event of your death, but they have different features and benefits.

Term life insurance provides coverage for a specific period, typically 10, 20, or 30 years. If you die during the term, your beneficiaries will receive the death benefit. However, if you outlive the term, the policy will expire and you will no longer have coverage. Term life insurance is generally the most affordable type of life insurance.

Whole life insurance provides coverage for your entire life, as long as you continue to pay the premiums. The premiums for whole life insurance are typically higher than for term life insurance, but the policy will not expire. Whole life insurance also accumulates a cash value component that grows over time. This cash value can be used to pay for the premiums, or it can be withdrawn or borrowed against.

Here is a table that summarizes the key differences between term and whole life insurance:

| Feature | Term Life Insurance | Whole Life Insurance |

|---|---|---|

| Coverage period | Specific period, typically 10, 20, or 30 years | Entire life |

| Premiums | Typically lower than whole life insurance | Typically higher than term life insurance |

| Cash value component | No | Yes |

| Death benefit | Paid if death occurs during the term | Paid regardless of when death occurs |

Which type of life insurance is right for you?

The best type of life insurance for you depends on your individual needs and budget. If you are looking for affordable coverage for a specific period, term life insurance may be a good option. If you want permanent coverage that will provide financial protection for your loved ones for life, whole life insurance may be a better choice.

Insurance brokers and agents can help you to understand the different types of life policies and choose what is best for you based on your needs.