Life can change quickly, and often, without warning. Properly preparing for the future includes making sure your loved ones will remain financially stable should something happen to you. One of the best ways to do this is by purchasing life insurance. However, with more than one option to consider, it can be challenging trying to figure out which is most suitable for your situation. The two main types of policies are term and whole life, and both have benefits to offer. Here’s an overview of how each one works to help you make an informed decision.

Term Life Insurance 

Term policies are a popular choice for those who want protection at a lower cost. This is typically the least expensive way to buy life insurance because it’s designed as temporary coverage. You can select a policy that will last for a certain number of years and, in the event you pass away within this timeframe, your beneficiaries will receive a payout.

Otherwise, once the term is over, your coverage will no longer be active unless you decide to renew it or convert it to a whole life policy. You may consider term life insurance if you just want coverage until the mortgage is paid off or your children graduate college.

Whole Life Insurance 

In contrast, whole life insurance will continue to provide you protection for the rest of your life as long as you keep current on the premiums. Another major difference is that whole life policies build cash value. Every time you pay your premium, a portion of it will be set aside to accumulate on a tax-deferred basis until you wish to borrow against it or cash out the value. These are living benefits that you may use while you’re still alive. Because they offer permanent coverage, whole life policies are generally more expensive. 

If you’re ready to shop for life insurance, turn to Area Wide Insurance Agency for help understanding all your coverage options. As a local agency based in Naples, TX, they’ll take the time to answer your questions and thoroughly assess your circumstances before providing you with a customized solution that fits your unique needs. For more than 35 years, they’ve been offering reliable products and competitive rates to residents across the northeast Texas area. Call (903) 897-5651 or visit them online to request a free quote.