There are two primary kinds of life insurance: whole and term. An easy way to differentiate between the two is by remembering that a whole life policy will last for your whole life, whereas a term policy will last for a predetermined amount of time. If you’re still unsure which type of coverage to buy, here’s a more detailed explanation of each. 

What Is Whole Life Insurance?

Whole life insurance is essentially a permanent policy that will remain in effect until you die. As such, it tends to cost considerably more than term life insurance. Since it accumulates a tax-deferred cash value over time, though, you can borrow against it while you’re still alive. For this reason, many people choose to supplement their retirement savings with a whole life policy. It’s essentially a low-risk investment that will always be there should you need it. Upon your passing, the insurer will absorb the cash value and then pay the death benefit to the named beneficiary. 

What Is Term Life Insurance?

Term life insurance policies remain in effect for a limited amount of time. They generally last for anywhere from 10 to 30 years. They don’t accumulate cash value, and if you outlive the duration of the policy, your family will not receive any funds. As such, premiums tend to be relatively affordable. 

Term life insurance is perfect for those who wish to protect their family’s financial security in the event of their untimely death. If you have 20 years left on your mortgage, for example, a 30-year policy can provide enough coverage for your family to maintain their standard of living following your passing. Once the policy expires, you’ll undoubtedly be in a much different financial position than you are today and may no longer need the coverage. In the meantime, though, a term policy can provide considerable peace of mind. 

To determine whether whole or term life insurance will meet your needs, turn to Daniel Oliver Insurance Agency. Located in Edina, MN, this Farmers Insurance agency is proud to serve clients throughout the state.  Daniel Oliver has more than 30 years of experience in the field and can help you find policies with everything you need and nothing you don’t. To request a quote for life insurance—or any other coverage—reach out online or call (952) 925-4454.