Get Protected Today

---

When it comes to life insurance, most people are familiar with two types: whole life and term. However, these are just a fraction of the many policies available. Life insurance serves the purpose of insuring the life of the policyholder, providing financial protection for their beneficiaries. Whole life insurance provides coverage for the individual's entire life, up to a predetermined age (usually 100 or 121), guaranteeing a specific payout to the beneficiary. On the other hand, term life insurance offers coverage for a set period, typically 10 to 30 years, with a payout in the event of the insured person's death. Term policies are generally more affordable, as they are based on statistical projections of lifespan.

While both types of policies have their merits, it's crucial to understand their distinct differences before making a decision. This page provides a brief overview, but we encourage you to reach out to us for a free consultation or review of your current coverage. Our experts can guide you through the intricacies of the various policy types and help you choose the one that best suits your needs. Don't leave such an important decision to chance—ensure you have the right life insurance coverage to protect your loved ones. Contact us today to get started. 

Whole life insurance encompasses a range of policies designed for different purposes, but at its core, it serves a consistent objective. These policies are tailored to an individual's life based on statistical projections, considering various factors that estimate their expected lifespan. Essentially, whole life insurance assesses the likelihood of reaching a specific age and calculates the premium accordingly. This premium is then divided by the desired coverage amount to determine the policy cost. Typically, individuals under 40 years old and in good health, seeking long-term security and coverage for their family, should strongly consider a whole life policy.

Pros of Whole Life:

• Policy Generates Cash Value
  • Whole life policies operate similarly to a savings account at a bank; money that is paid towards the premium goes into an interest yielding account which allows it to generate a guaranteed interest rate, generally significantly higher than that of a standard savings account. This cash value is accessible, almost always, tax free to the owner of the policy. With whole life policies, the cash value can also be used as leverage to secure loans for large purchases.

• Whole Life Policies offer a variety of "riders" or add on options giving the policy more value
  • Riders are additional services that can be added onto policies for a minute increase in overall cost. Different whole life policies offer different riders, however most popular riders include Accidental Death coverage (an increase of 2 or more times the policy amount in the event of accidental death), Child Rider (a guaranteed amount generally ranging from $10,000 to $25,000 for each of the dependents of the policy owner), Long Term Care (the ability to cash in a portion or all of a policy value while the insured is still alive to pay for expenses such as nursing homes or hospice care.)

• No Lapse Guarantee
  • Most all whole life policies come with a no lapse guarantee which offers security should a change in financial status occur. While the method of these guarantees differs, in general, should an event happen where the insured becomes disabled or financially unable to continue to pay for their policy, the terms of the policy will change allowing for the payments to stop but the policy to remain in place. 

Cons of Whole Life:

• Cost
  • In general, whole life policies tend to be more expensive overall than term. This is because a whole life policy is guaranteed to pay out the total amount when the insured dies.  The younger and healthier the insured is at the time of application, the less expensive the policy will be. 

• Requirements
  • Many types of term policies have very few medical requirements beyond being honest on the application. Whole life policies often have a more extensive process to prove that the individual applying for the policy is able to be insured. These requirements might include medical exams, blood work, urine tests, or a verified copy of medical paperwork. Any of the requirements are paid for by the insurance company, but can be a process that some individuals do not want to go through. 

Term life insurance is a comprehensive category that encompasses various insurance policies. Its primary purpose is to provide coverage for a specific duration, offering a safety net in case of unforeseen tragedies while outstanding debts remain. While term policies are often marketed as the ideal life insurance option due to their lower cost compared to whole life insurance, it's important to note that they come with certain trade-offs. These policies prioritize affordability by sacrificing some of the benefits associated with whole life insurance, as they are designed to cover unlikely events statistically.. 

Pros of Term:

• Financial security in the event of a tragedy
  • Major life purchases are a big step for any individual or family Though exciting, the purchase of a house or business can leave a large debt weighing on a family's finances until paid off. In the event of a sudden tragedy leading to the death of a financial contributor, the debt left behind can be insurmountable. Term policies are phenomenal at providing an affordable security blanket to cover these debts. For example, a young couple buying their first house most likely will not have the assets necessary to ensure the mortgage can be paid in full if need be. If the length of their mortgage is 30 years, then the couple would benefit from taking out a 30-year term policy for the value of the house. This policy would ensure that, should one of them pass away, the other would be able to afford to pay off the debt. 

• Easier to Aquire 
  • Unlike whole life policies, which generally require medical exams and more paperwork, term policies generally allow for easier underwriting and quicker obtainment. 

• Inexpensive coverage during transitional periods. 
  • Term policies are often utilized in cases to provide a security blanket during a period of waiting or financial transition. Usually, these policies are in place when waiting for an inheritance or a retirement pension to kick in. Many retirement pension plans offer insurance coverage, but coverage doesn't begin until a specific age. During the period prior to the coverage beginning, a term policy could be a good option to provide security. 

Cons of Term:

• No return on Investment
  • Term policies are designed to minimize risk to the insurance company, meaning statistically, the chances of the insurance company having to pay out the value of the policy are generally low. When the term ends, the policy is over and the amount paid in premiums is gone. Unlike whole life policies where the premiums earn cash value, term policies don't gain any value and the investment made for the coverage is kept by the insurance company. 

• Used as replacement for whole life
  • All too often, we talk to people who tell us they have life insurance that they bought, and they believe they are securing their families. However, when we look over their paperwork, we discover that what they have is a term policy. Usually, the policies that are being paid will most likely expire before they are needed, and once they expire, the age of the person who has the policy will cause a new policy to be too expensive. Certain circumstances call for term policies to be implemented, however, more often than not, when whole life is available it is a more worthwhile investment.