Life insurance protects family members from loss of revenue in case the breadwinner of the family passes away. When choosing a life insurance plan, many distinct facts must be taken into consideration, such as financial capability, age of insured (remaining lifespan), amount of death benefit wished, and if the insured is looking for living benefits.
After analyzing these matters, one has to choose between a Term Life insurance policy or a Whole Life insurance policy. These two policies have significant differences that must be understood and considered. So what exactly are these differences?
Term Life
Pros:
Usually cheaper during the first couple of years compared to a Whole Life Policy
Usually pays a higher death benefit amount
Cons:
Has an expiration date
Gets more expensive after every renewal
Whole Life
Pros:
No expiration date
Same price forever
Allows borrowing from the death benefit while still alive without having to pay back
Gains interest
Cons:
Lower death benefit
Usually more expensive during the first years compared to a Term Life policy.