When you consider buying a life insurance policy, you discover there are two primary types: whole life and term life policies. They both protect your family financially, but they differ in a number of ways. Here’s what you need to know about each type of policy and the differences between them.

Term Life Insurance

Term life insurance is only temporary. It lasts for a specific number of years, whether that be 5, 10, 20, or more, and it pays a death benefit if you die while the policy is in effect. Once it expires, it must be renewed if you want to maintain coverage. The cost to renew is typically greater than it was before because you’re older and your health risks are greater. Term life is typically basic, without many of the benefits whole life offers, and it’s relatively inexpensive. Because of the low cost, policyholders can often afford more coverage than with other alternatives. Note that some policies permit the insurer to raise premium prices periodically, although most guarantee prices for the duration of the policy.

Whole Life Insurance

Whole life insurance is permanent. It lasts until the policyholder dies — unless they fail to maintain premium payments. In addition to paying a death benefit, a whole life policy also accrues a cash value that you can withdraw before death as part of a retirement plan. A term life policy does not feature this type of investment arm. Whole life is beneficial because it never expires and forces you to save for the future, but it also costs considerably more than the term life alternative. Because of this, you may purchase less coverage than you want or need.

For friendly, helpful guidance designing a life insurance policy, contact Tim Bryan Insurance, the premier State Farm agent in Andalusia, AL. He serves businesses and individuals throughout Covington County, specializing in auto, life, business, health, and home insurance. Visit the website for more information on location details, or call (334) 222-1460 to request a quote and start designing your policy today.