Life insurance comes with many decisions, one of the biggest is deciding between term life or a permanent life insurance policy. Which one is right for you depends on several factors, including personal needs and preferences.
First, keep this in mind—there are many different types of permanent life insurance, including whole life, universal life, and final expense. If you decide permanent life insurance is a better option, or if you’re still unsure, keep in mind that one permanent policy may work better for you than another. It all just depends on the type of policy you’re looking for.
Term Life Insurance
With term life insurance, you are signing up for a “term” of life insurance coverage. This means that, eventually, your policy will end. You can pick terms between 10 and 30 years. If you pass away within your term, your policy will issue your death benefit to your beneficiaries. You can either renew your same policy, find a new one, or let your coverage lapse if you don’t.
Coverage for the typical term life policy ranges from $100,000 to $500,000. You and your beneficiaries can use this money for anything you choose, from mortgage payments and funeral planning to charitable giving and inheritance.
Permanent Life Insurance
On the other hand, when you purchase a permanent life insurance policy, you sign up for a lifetime. So, from the moment you’re enrolled, you’re covered until you pass away as long as you make your monthly payments.
Because there are multiple permanent life insurance policies, the death benefit will vary. For the larger policies, whole and universal life, expect anywhere from $200,000 to $1 million. For final expense, which accepts individuals who otherwise wouldn’t qualify based on age and health, is an exception, with death benefits from $2,000 to $50,000. We will primarily be comparing whole and universal life. However, final expense does fit into the permanent category.
Comparing the Two
There are far more factors to consider than renewal when deciding which policy is right for you—first, price. Term life insurance tends to cost significantly less than permanent policies. It is often well-worth maneuvering the renewal process for the cost.
The only other feature missing from a term life policy is the cash value. Whole and universal life earns money for you to use over time, but term life does not. However, this is a small amount with whole life and is not added to your death benefit if you don’t use it. Universal life earns more and is more investment-based but takes more work and costs more than term life.
So, your choice between the two types depends on many factors. However, keep these things in mind as you move forward with your decision.
Find the Best Coverage with Secure Insurance Group
You can make the right life insurance decisions with Secure Insurance Group. Call us to get started today at 1-877-871-7328.