When shopping for life insurance, you have a couple of different options, including whole life insurance and term life insurance. For someone who does not know much about these policies, it can be tough to tell the difference. However, there are actually some pretty big differences between these different types of coverage. Even though term life does have its benefits, such as being more affordable than whole life insurance in many cases, many people find that whole life insurance is the superior choice. These are a few reasons why.
1. You Don't Have to Worry About Outliving Your Policy
One great benefit of whole life insurance is that, as the name implies, it lasts for your whole life. With a term life policy, there is always the possibility that you pass away after your policy expires but before you have had the chance to purchase another policy. This could leave your loved ones without the coverage that they need to pay for funeral expenses, final medical bills and other costs.
2. You Can Lock in Your Rates for Life
Another thing that you have to consider is whether your life insurance rates will go up as you age. With a term life policy, you might find yourself renewing at a much older age -- and therefore at a much higher rate. When you sign up for a whole life policy, however, you lock in your rates at the age that you are at when you sign up. This means that you won't have to worry about your premiums going up when you get older. With term life insurance, on the other hand, you might find yourself having to pay more at a time when you are actually most vulnerable -- in retirement.
3. Your Policy Can Build Cash Value
With term life insurance, if you don't pass away during your term, you won't get anything out of the deal, no matter how much you might have paid in premiums. With a whole life insurance policy, however, your policy can actually accumulate cash value over the years, leaving you with an option for obtaining cash money later on, when you need it.
As you can see, whole life insurance can be highly beneficial. If you are thinking about signing up for life insurance, it might be a good idea to look into whole life options rather than just focusing on term life insurance. Contact an insurance agency to learn more.