With carriers offering a variety of options, shopping for life insurance can be a confusing experience. This type of coverage comes in different forms, two of which are term and whole life insurance. Understanding the essential differences between these two policies will help ensure you get the right protection for your family.

What Are Term Life Policies?

Because this option is typically less expensive, it’s a popular version of life insurance. The policy guarantees death benefits if the policyholder passes away within a specified period, typically 15 to 25 years. You can typically choose the time frame. 

This is ideal for those with financial obligations that will change over time. For instance, many new parents choose 25-year policies to protect their children until they’ve finished college and started building their own lives. When the term expires, you can either let the policy end or renew it at a higher rate. However, if death doesn’t occur within the time frame, you won’t earn the benefits even if you paid the premiums.

What Are Whole Life Policies?

Unlike term life policies, whole life insurance never expires, so your beneficiaries will receive the benefit whether you pass away in 10 or 50 years. This makes it an attractive option for those who want to leave a legacy for their family, even after their children are grown.

This type of policy also has a saving and investing component, so your contributions may build up equity over time. Investment and interest rates vary across policies. Many will even allow you to make withdrawals or borrow against the policy in the future. 

Let Ron Nall State Farm® Insurance help protect what matters most to you. With years of experience providing Andalusia, AL, residents with customized coverage, he will evaluate the needs of your family before making recommendations. Visit his website to learn more about life insurance, or call (334) 222-3106 to request a quote.