Life insurance may not be the most fun topic to think about, but it’s always important to ensure that you have some form of coverage in the event of your death. What you may not know – especially if you’re younger and haven’t looked into life insurance coverage yet – is that it comes in many forms, and these forms will suit different types of people based on lifestyle, age, financial situation, and more. Two of the most common types of life insurance are term life insurance and whole life insurance. Read on to learn more about the distinction between the two types and the sorts of people who would benefit from each different type.
Term life insurance, as its name implies, provides coverage for a designated period of time, often coming in increments of ten, twenty, or thirty years. Because these policies most commonly run out before the policyholder passes on, the insurance companies often do not pay death benefits, which allows them to offer term life insurance policies at a far cheaper rate than whole life policies. The cost also depends on the insured’s age: as someone is far less likely to die in their twenties or thirties as opposed to their fifties and sixties, the premiums are cheaper the younger you are. However, unlike whole life insurance, term life policies don’t accumulate cash value, and the premium remains the same throughout the term. Bottom line: term life insurance is a great solution for temporary insurance needs.
Term life insurance is a great form of coverage for customers including newer families and people who may not be able to afford permanent coverage at this time in their lives, but would like to be properly covered in the meantime as they build their assets and save for a more permanent form of insurance coverage. Take new parents, for example: raising children can be exorbitantly expensive, and the unexpected death of a parent can devastate a family, so a policy with a higher death benefit during the years in which their children are completely dependent on them would provide them with sufficient coverage in the event of a death.
On the other hand, if you are looking for permanent coverage, whole life insurance may be the better option for you. Whole life insurance is the most well-known and commonly used form of permanent life insurance, and, as its name states, it is designed to cover you for your entire life. Though the premiums are more expensive, at least initially, as long as you pay on time each month, they will not rise, unlike term life insurance, and we offer competitive whole life rates compared to term rates. Whole life also allows the owner to take out a policy loan on your cash value if the need arises. This may be helpful when tackling student loans or other unexpected expenses.
Whole life insurance is a good policy for someone who wants to lock in a rate and doesn’t want to have to worry about their insurance expiring as long as premiums are paid on time. It’s for people who want to have peace of mind knowing that their policy will always be there to protect their family and their assets. Whole life insurance unlike term policies, build in cash value over time. What this means is that as you continue to pay each month, the cash value of the policy steadily grows.
About National Catholic Society of Foresters
At National Catholic Society of Foresters, we pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a Fraternal Society, which means the sales from these financial services products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs. Our portfolio is extensive, ranging from various life insurance policies to IRA’s to support your financial needs no matter what stage of life you’re in. For more information, contact our friendly experts today at (800) 344-6273.