Life insurance is designed to give you peace of mind should a tragedy strike. It will provide your loved ones financial security and protection. When it comes to life insurance, there are two main options: whole life insurance and term life insurance. Both policies have their benefits and downsides.
What is Whole Life Insurance?
Whole life insurance lasts your entire (whole) life, as long as you pay the premium. These policies are usually more expensive than term life policies because you are building cash value (like a savings account earning interest at a fixed rate).
What is Term Life Insurance?
Term life insurance will cover you for a specific amount of time. If you get a 10-year policy, you are covered for those 10 years (or that term). If you pass away during that 10-year policy, your beneficiaries will receive the full payout amount. You typically buy term insurance anywhere from 10 to 30 years.
What are the main differences between whole life insurance and term life insurance?
- Whole Life is more expensive than Term Life
- Whole Life gives you coverage for longer than Term Life
- Whole Life builds cash value overtime and can offer tax benefits
- There is no penalty for cancelling a term life policy but there could be a penalty for cancelling a whole life policy.
Which life insurance policy is right for me?
This is up to your individual circumstances. Our advisors or Bryce Bilyeu, our Life Insurance Specialist, can guide you through this decision based on your needs at this time. Usually, Term Life Insurance is ideal for young families whereas whole life policies are ideal for adults nearing retirement. Younger families tend to have debt and dependents that they need to cover if something were to happen. Start by considering why you are purchasing life insurance.
Can I purchase both whole life and term life insurance?
Yes. There are unique situations for everyone and depending on your situation and stage of life, you can have both types of policies.
As an employer, how can I help my employees purchase life insurance?
If you are a business owner, consider offering life insurance to your employees. Our Group Benefits division can help you offer a guaranteed life insurance policy at no cost to the business. The life insurance policy can be portable if the employment is terminated.
We never want to hear someone say, "I wish my spouse (or friend) would have bought life insurance". That is why we will continue to educate and ask you if you want to purchase a life insurance policy. We will also work through which option is best for you.
If you are interested in learning more about life insurance or about the services TROXELL provides to protect you, please contact us today!
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Alysse Hewell
ALYSSE IS THE MARKETING DIRECTOR AND PERSONAL LINES AGENT AT TROXELL. OUTSIDE OF WORK, ALYSSE ENJOYS SPENDING TIME WITH FRIENDS AND FAMILY, TRAVELING, AND COOKING. CONTACT ALYSSE AT 217-321-3222 OR AHEWELL@TROXELLINS.COM
This information is advisory only. The author assumes no responsibility for management or control of loss control activities. Not all exposures are identified in this article. Contact your local TROXELL insurance agent for coverage advice and policy service. Neither TROXELL nor its affiliates or representatives offer legal advice. Consult with your attorney about your specific situation.