When it comes to protecting your family from a financial crisis, life insurance offers considerable peace of mind. For a monthly premium, these policies provide selected beneficiaries, such as your spouse and children, with a lump sum payment that can help cover a variety of expenses after your death. But while making the decision to get life insurance may be an easy one, knowing which type of policy is best for you isn’t always so clear. To help you better weigh your options, here is what you should know about whole and term life insurance, two of the most popular options available.

Term Life Insurance

Term life policies provide a tax-free death benefit within the specified amount of time you are covered. While the premiums for these policies are typically lower than that of whole life insurance, the benefits will only apply for the duration of the coverage. For example, if you have a 30-year plan and pass away during that time, your beneficiaries will be entitled to receive the lump sum payment. However, if you are still alive after the policy period has expired, your benefits are no longer accessible.

Whole Life Insurance

Whole life insurance also provides a tax-free death benefit the policyholder passes away. However, whole life policies never expire. Additionally, they accrue cash value over time that you can borrow at a later date while you are still alive.

Which Should You Choose?

If you’re on a limited budget, term life is usually the better option. However, since benefits will expire at a certain point, choose a coverage period that fits your needs. For example, many new parents will design term life plans so they are covered until their children reach adulthood and no longer need financial support.

Although whole life plans do carry higher premiums, the long-term value it can build is a benefit worth considering. If you have room in your budget to pay for whole life insurance, doing so can help you accrue savings to use for emergency expenses down the road. You’ll also have peace of mind that your beneficiaries will always gain funds in the event of your passing.

Serving families across Hawaii for over 60 years, Mutual Underwriters is the trusted resource for all your life insurance needs. Through one-on-one guidance, this Honolulu insurance agency will help you assess the benefits of term and whole life policies, so you can choose the best policy for your needs, risks, and budget. For additional protection, this firm also offers comprehensive home, health, and auto insurance at competitive rates. Visit this agency online to learn more about their expansive and affordable insurance options. To discuss your options or request a custom quote, call (808) 532-2888.