Having life insurance in place protects your family financially after you’re gone. However, you’ll need to choose between a term and whole life policy, which can be a complex decision for most people. The following information explains the difference between these types of insurance, so you can make the best choice for you and your family.

Term Life Insurance

Term policies are fairly straightforward; when you purchase a policy, you choose a set period of time during which death benefits will be paid to your family if something happens to you. Terms can range from 1 to 30 years, but most are 10, 20, or 30 years. Premiums are generally fixed, so policyholders don’t face rising insurance costs during the chosen term of the policy.

The major downside to term life is if you live longer than the term, you’ll need to renew the policy or risk losing your death benefits. If you’re of advanced age, securing a new policy may be far more expensive and subsequently not worth the cost. This is why most people retain their term life coverage until their children are independent, under the belief savings accrued by this point will be a sufficient safety net.

Whole Life Insurance

Conversely, whole life insurance has no term. These permanent policies pay out death benefits no matter when you die, provided you pay the premium as required. They also contain the added benefit of having cash value. Over time, your premium will be split in two, with one portion going to your death benefit while the other is diverted into a savings account. In this sense, a whole life policy is more like an investment tool.

The biggest drawback of whole life is the cost. It can be a challenge to cope with the higher premiums, which are often more expensive than term policies. Additionally, the investment portion of these policies may not accrue interest as rapidly as some other investment tools. Accordingly, whole life policies are best suited to individuals with complex financial situations and enough wealth to cover costly premiums.

If you have questions about obtaining a life insurance policy in Coolville, OH, Coggeshall-Simmons Insurance Inc. has answers. With more than four decades of industry experience, you know you can trust the insurance products this agency has to offer. Additionally, your agent will assess your needs to help you determine whether a whole life or term policy works best for your situation. If you’re looking for other insurance products, they also offer coverage suited to businesses, homeowners’ insurance, and policies for vehicles. Get answers to your questions today by calling (740) 667-3111. You can also visit them online to get your personalized quote.