Life insurance is a vital financial asset to have when building a secure future. However, knowing which type of policy will best meet your needs can be challenging. To make the right decision, assess the differences between term and whole life. Below is an overview of how each works.

A Guide to Term vs. Whole Life Insurance

Term Policies 

With term life insurance, policies are designed to provide protection only for a specified period. Should you pass away while your coverage is still active, your beneficiaries will receive death benefits. If it expires before your passing, there won’t be any payout to collect.

Term life is uncomplicated and budget-friendly. Young adults and parents of young children may prefer term life policies because the insurance will pay benefits, allowing surviving family members to cover mortgage loans and childcare expenses, and premiums are manageable.

Whole Life Policies 

In contrast, whole life insurance covers you for the remainder of your lifetime if your premiums are paid. Another significant difference is that a whole life policy can serve as a savings vehicle. It builds cash value on a tax-deferred basis as you pay premiums. You can make withdrawals whenever you choose and use them however you see fit. Some whole life policies, for example, may be used to fund retirement or a child’s college education. Some policies also pay out dividends. Consequently, whole life insurance is more expensive to purchase than term.

If you’re ready to start shopping for life insurance, our knowledgeable agents at Farmers Insurance Group will assist you in exploring each type of policy further. We’re dedicated to helping the residents of Mountain Grove, MO, make complicated coverage decisions with confidence. Our team is proud to offer a range of high-quality products at competitive rates so every client has adequate protection. Call our office at (417) 926-7900 to schedule an appointment, or visit us on Facebook to keep up with agency news.