The Differences Between Whole Life and Term Life, insurance agency in Plano, Texas

The Differences Between Whole Life and Term Life

What are the differences between whole life and term life insurance?  Your insurance agency in Plano, Texas has the answers you need.

If you’re trying to buy life insurance, then your already know that the two major types are whole life and term life.  However, you may also be confused about the differences between each type of policy.  Don’t stress!  Your insurance agency in Plano, Texas is ready to break down the pros and cons of each with you.

What is Whole Life Insurance?

Also called permanent life, whole life insurance is life insurance that will not expire before your death.  This means that, so long as you pay your premiums, your insurance company will provide coverage to your beneficiaries in the event that you pass.  Additionally, whole life insurance policies also have a “cash value” component that grows over time.  This cash value gives you the ability to borrow against your policy or cancel the policy to receive the cash value after a certain amount of time.

Pros and Cons

While whole life insurance can be useful as part of a custom finance strategy, this type of policy is normally better suited for individuals with a lot of disposable income and assets to play around with.  Otherwise, whole life is more expensive and complicated then a term life policy.  Additionally, depending on the type of policy you have, your cash value could actually shrink over time.

What is Term Life Insurance?

Term life insurance is probably what you imagine when your think of life insurance.  Essentially, you pay your premium during your selected term (normally 10, 20, or 30 years), and your insurer will pay your beneficiaries if you die during this term period.  Once your policy expires and you stop paying your premiums, then your policy is no longer in effect and your insurance company no longer has any coverage obligations.

Pros and Cons

Term life insurance is more affordable and easier to understand than whole life insurance.  You also don’t have to worry about hidden fees, exclusions, or risks with your policy.  Additionally, you have the ability to cancel term life insurance before it expires.  However, it’s important to keep in mind that your coverage expires with the end of your terms and that you’ll have to shop for a new policy if you still want coverage.

Ultimately, the choice between whole life and term life comes down to your individual needs and circumstances.  Regardless of the type of policy to choose, when you’re ready to get the insurance you need, then trust the best insurance agency in Plano, Texas.  Our dedicated professionals at Tri-Star Insurance are eager to get you the coverage you need.  Contact us to get started today!