According to aggregate statistics, 43% of Americans don’t have life insurance as of 2019. The reasons for this range from “I don’t think I need it” and “the process is too confusing” to “I have no idea how much coverage I need.”
The insurance brokers at IFG Insurance Services know that getting life insurance is a confusing process. For one, there are many kinds of life insurance policies to choose from—such as universal life insurance, mortgage life insurance, whole life insurance, and term life insurance—and it’s hard to figure out which one you need.
That’s why this blog will break down the differences between term life insurance and whole life insurance to help you out.
What is Life Insurance?
Life insurance is a contract between you and an insurance company that ensures that an amount of money will be paid to your designated beneficiaries upon your demise, in exchange for a monthly or yearly premium.
This is done because in the event of the death of a primary earner, their family might find it hard to make ends meet and sustain themselves. A life insurance payout saves such families from having to sell their assets.
The time period in which they receive the money depends on the kind of life insurance policy they choose.
What Is Term Life Insurance?
As the name suggests, term life insurance provides coverage to beneficiaries for a specific time period. It is most widely understood as pure life insurance, because it gives payouts to dependents in the event of a premature death within the term.
The insured person can choose between terms while buying the policy; these range from 10, 20, or 30 years. In term life insurance, the payout is also called the death benefit. Along with the death benefits, the cost and premium of term life insurance policy remain the same.
What Is Whole Life Insurance?
Whole Life Insurance FL covers everything that permanent life insurance and offers more on top of that. In addition to providing coverage, the insurance policy also offers a saving component. A portion of the premium paid by the insured goes to the insurance company. The rest of it is used to build the cash value of the insurance policy.
If the insured outlives the policy expiration date, a tax-deferred amount will be given to them as a payout.
Which One Is Better?
The kind of life insurance policy that you opt for depends on your circumstances and your health. The best way to decide which type of life insurance you should opt for is to speak to an independent insurance agent who will assess your requirements, medical records and family history.
Here at IFG Insurance Services, our Life Insurance Broker FL provide consultation sessions and instant free life insurance quotes to all our clients to help them decide which insurance policy they should acquire. Get in touch with us today to know more about our services in St. Petersburg, Florida!