Life insurance is one of the most loving financial decisions you can make for your family, and one of the most confusing to shop for. The first fork in the road is almost always the same: term or whole life? Here is the difference in plain English, so you can choose with confidence.
What is term life insurance?
Term life covers you for a set period, usually 10, 20, or 30 years. If you pass away during the term, your beneficiaries receive the death benefit. It is simple, and because it is temporary coverage, it is by far the most affordable way to get a large amount of protection while your family needs it most, think mortgage years and raising kids.
What is whole life insurance?
Whole life is permanent coverage that lasts your entire life as long as premiums are paid. It also builds cash value over time that you can borrow against. Premiums are higher than term, but they never increase, and the policy never expires.
How to choose
- Choose term if you want maximum protection per dollar during your working and child-raising years.
- Choose whole life if you want lifelong coverage, level premiums, and a savings component.
- Many families blend both: a larger term policy for the mortgage years plus a smaller permanent policy for final expenses.
The best time to buy is now
Life insurance rates are based on your age and health, so premiums only go up the longer you wait. Locking in a policy while you are young and healthy is the single biggest money-saver.
Want help comparing real options for your family? Learn more about life insurance or request a free quote and a licensed Fabco agent will walk you through it.