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Are There Significant Differences Between Term Life And Whole Life Insurance?

By: Joe Stewart

I've had quite a few people ask me what the real difference is between Whole Life Insurance and Term Life Insurance, And which they should buy As much as I like to help, the best that I can really do is explain the difference between the two and the pro's and con's of each type of policy. This way, the consumer, to make an informed decision before you buy.



Whole life insurance provides insurance throughout your lifetime, as long as your policy remains in good standing. These

policies are in effect util your death or the age of 100 years, whichever occurs first. Some of the pro's of a Whole Life

Insurance policy are that you will also build an account that has actual cash value. It works like this. A portion of the premium payments that you make are used to buy life insurance, while the remainder is placed into a savings account that will accumulate interest. You may borrow against this savings account later in life, if you need to, but you have to pay it back. This gives you a bit of piece of mind in case of unexpected vehicle repairs, hospital stays, ect. or any other of lifes little emergencies.



Some of the cons of Whole Life Insurance is that it can be expensive. The premium payments for whole life insurance coverage

will be significantly higher than a Term Life policy would be. Another concern is that as you get older the savings account

feature isn't as good of a benefit. For someone just starting out, this makes more sense because they have their entire lives

ahead of them, but for someone middle aged or above, I'd buy Term and invest elsewhere.



Term Life Insurance is just exactly what it says it is, "Term". This means that it covers you for a specific period of time or a Term. You could buy a Guaranteed Term, Recurring Term, "10 Year Term" ect. Do you understand?



A Term Life Policy is also known as "pure life insurance" because that's all you're buying. Here are some more differences between Term And Whole Life unlike Whole Life policies, there's no savings account that accumulates or to borrow against. All that you're paying is for insurance. Another con is that, as stated above, some Term policies are only for that specific Term or time frame, not your entire life. {Some Term policies, such as Guaranteed Term, can be rolled over, but that's another story. I explain everything at my website.



Most Term policies are temporary insurance. An example of how this can be used would be for the "breadwinner" of the household who is middle aged, the kids are grown, but still in college, he or she has been paying on their major assets, like their home, ect. for several years and they need some security to make certain that if anything happened, everything would be taken care so that the family could go on without any issues, other than the loss of their loved one. A 10 or 20 Year Term Policy might be a good option for the fictional example above, depending on their living arrangements.



I hope that, you understand now why it's difficult to give specific advice to people without knowing their specific

circumstances. Just learning the differences between these two more popular types of insurance policies should help you

immensely in the future. Good luck!

Article Source: Free Content Articles Directory

Joe Stewart is a Webmaster and former Life & Health agent. He's made understanding life insurance easier for consumers. You can read detailed explanations about life insurance at his website target="_new" href="http://TheLifeInsuranceGuys.com/">TheLifeInsuranceGuys.com or by clicking on Free Life Insurance Quote

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