ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Whole Life Insurance vs Term Life Insurance

Updated on October 26, 2012

Taking a life insurance policy may be seen as another expense or financial burden that we should avoid. However, if you seriously think about it, you will discover that insurance has benefits which can work for you and/or your family depending on the situation. Although this will mean making payments for premiums which will in turn reduce your disposable income, taking either a whole life or term insurance policy will reward you in the long term if moves you from where you are to where you will be in the future. 

So what do I mean by this? Let me start by saying that neither whole life nor term life insurance is necessarily the better option for any particular individual. What is whole life insurance and what does term life insurance mean? Whole life insurance refers to coverage that provides, as the name implies, insurance for a person's entire life. It is designed to meet permanent needs, such as: providing future financial needs, final burial expenses, etc. One of the wonderful benefits of this type of insurance is that it has a cash value that grows and which can be used to obtain loans. 

Term life insurance on the other hand, as its name implies, is insurance coverage that runs only for a specified period of time. Unlike whole life, it does not have a cash value, but will pay beneficiaries a death benefit as designated by the insured. Consequently, this type of insurance cannot be borrowed against prior to death and you can’t "cash in" on this type of policy. Most often, the term life insurance is purchased to achieve a specific purpose, such as: protect your family from incurring debt from a particular business deal, et al. 

Although features of these two types of insurance have been mentioned already, there are additional features, which include: for whole life insurance; policy is dependent on promptly paid premiums and is often more expensive since it covers the whole life without increase in premium. While for term life insurance, this includes: possibility of an increase in premium paid if one wants to continue insurance after expiration of term as a result of illness or old age. Plus, policy is also dependent on prompt payment of premium.

So far so good, however you may still be wondering which one is best; whole life or term life? That choice is really up to you because you need to consider how the benefits of each policy suit your unique situation. You do this by considering what you now know about the policies and by assessing your life insurance needs by making use of tools such as MSN Money's Life Insurance Needs Estimator. Then you should speak with a qualified life insurance professional for further advice.        

Comments

Submit a Comment

  • profile image

    Aussie Insurance 

    7 years ago

    Great article. The best point that you make here is the point that there is no "right" answer when it comes to deciding between whole and term life insurance. The answer depends on a number of variables that are unique to the individual. That is why it's so important to take the time to compare life insurance options and educate yourself about the different choices available so that you can select the plan that is right for you.

working

This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

Show Details
Necessary
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
Features
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Marketing
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Statistics
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)