Title: Term and Whole Life Insurance: Differences and Benefits

Article Summary:

Investing an insurance means investing in your quality life. Insurance can pay for preventive medical treatments to treating illnesses.

Article Body:

Term and Whole Life Insurance: Differences and Benefits

Investing an insurance means investing in your quality life. Insurance can pay for preventive medical treatments to treating illnesses. Accidents can happen from time to time, whether you are taking road trips, travel different places, in school or at work. It is very important to be covered or you will be dealing with the burden of paying inflated bills just for hospitalization or medical treatment. Nothing is permanent; change is constant, if you possess good health at the moment, it does not mean that you will still have that in the long run. Preventive care can be done but there is nothing better than knowing you are fully protected and insured. Insurance can be a term and whole life insurance Portage IN.

Difference of Term and Whole Life Insurance

Term Insurance

Term insurance offers basic insurance protection or a policy that pays a death benefit that can provide income and assets for your children in case you are not around anymore. Term insurance requires you to pay your annual premium while the insurer guarantees that it will pay your beneficiaries the face amount of the policy. The main goal of a term insurance is to protect and insure your family for a specific period of time. It provides coverage at a permanent rate of payments for a limited period of time. During the end of the period, coverage at the previous rate of premiums is no longer guaranteed and the client must either withdraw the coverage or obtain different coverage with different payments or conditions. The death benefit will be paid to the beneficiary in the event that the insured dies during the period. This insurance is not generally used for estate planning needs or charitable giving strategies. It is mainly used for pure income replacement needs of an individual. It satisfies claims against what is insured if the premiums are up to date and the contract is not expired. Term insurance is much cheaper than whole life insurance. Term insurance provides you with heavy insurance coverage for a very low price. This is because it does not often pay for death claims. Term insurance provides the necessary protection for the individual and a nice amount of change for the insurance company because it is generally low risk. Term insurance is primarily used to provide coverage of financial responsibilities for the insured or his beneficiaries.

The other uses of term insurance are:

Help provide for a family’s loss of income

Cover short-term debts and needs

Provide additional insurance protection during the child raising years

Provide longer term protection to help pay off a mortgage, or to help pay for a college education

Term insurance is the simplest and most straightforward form of protection.

Whole Life Insurance

Whole life insurance provides basic death benefit while building up “cash value”. Cash value is a savings feature that one can withdraw or borrow. A portion of the money goes to buy the policy’s death benefit and the other goes to the cash value account the moment you pay your premium. The cash value grows as the years go by because whole life policy also pays for dividends. Whole life insurance provides lifetime protection and accumulates cash value that the policy owner can borrow against. This insurance is also independent from employment or pension plans. Whole life insurance covers your beneficiaries for a lifetime. It can also serve as an additional investment or savings vehicle if you are a high-income individual who max out tax deferred investments. Whole life insurance typically requires the owner to pay premiums for the life of the policy. Some arrangements can be made to let the policy be paid up which means that no further payments has to be made in as few as 5 years or with even a single large premium. Universal life insurance generally allows more flexibility in premium payment.

Whole life insurance offers level premiums and life insurance protection forever, provided that premiums are paid as required to keep the policy in strength. Whole life policies can also accumulate cash value on a tax-deferred basis that can be used in case of any emergency or to help with life’s opportunities. Whole life insurance provides for a family’s loss of income, mortgage costs, and educational needs while it gives easy access to cash value which can be utilized for the many opportunities of living.

Insurance, regardless of its types, has one major function. It is to protect and save an individual or a family from facing the financial burden of high medical and health needs. Having insurance will help you out in maintaining the health and wellness of your family keeping all of you fit and productive.