A solid life insurance policy will give your family financial security if you pass away unexpectedly. Specifically, upon your death, these policies will pay out a pre-determined amount to named beneficiaries—such as your spouse or children. This lump-sum and tax-free payment can be used for anything—including making up for lost income, covering funeral expenses, and paying the mortgage. But while all life insurance plans follow this same general concept, it’s important to note that they can be structured differently. If you’re considering your options, here’s what you should know about the two most popular forms of coverage: term and whole.

What Is Term Life Insurance & When Should You Consider It?

A term life policy is designed to cover a specific period that fits your needs. For example, some plans may last for 15 years, while others may provide coverage for 30 years.

If you pass away during this period, your beneficiaries will receive the funds as listed by your policy. However, if you are still alive when the plan period ends, no benefit will be available.

Term life insurance premiums are relatively affordable compared to other options—especially if you are younger and in good health. So if budget is an issue, it may be the best plan for you.

These policies are also ideal for those whose financial responsibilities may change over time. For instance, parents with young children may consider a 20-year policy to ensure their little ones will be provided for until they are adults. Or, if you have a mortgage, you might choose a plan that lasts until the home is paid off.

What Is Whole Life Insurance & When Should You Consider It?

Unlike term plans, whole life policies last indefinitely so long as you continue to meet all premium requirements. At a certain point, your account will accumulate interest and build cash value over time. These additional funds can be borrowed by you while you are still alive.

If you want to provide for your loved ones no matter what the circumstances, a whole life plan can give you peace of mind. The cash value can also help you later in life, such as by providing funds for emergency expenses or to supplement your retirement income.  Keep in mind, the premiums for this option are considerably higher than what’s required for a term life plan.  

Serving clients in New Braunfels, TX, since 1948, Comaltex Insurance Agency offers coverage options you can feel confident about. With a personalized approach, these friendly professionals will review your needs to help determine what life insurance plan is best for you. Whatever option you choose, count on this team to provide affordable rates and responsive service. To learn more about their many products—including home and auto insurance—visit this local agency online. For quotes, call (830) 625-7511 to speak with an experienced insurance agent.